CNN
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The long-resilient US labor market slowed down a little in May, adding 139,000 jobs, according to Bureau of Labor Statistics data released Friday.
Last month’s job gains, which came in slightly more than expected, marked a retreat from April, which was downwardly revised to 147,000.
The unemployment rate held steady at 4.2%, and wage gains continued to outpace inflation.
Economists were expecting the economy to have added 130,000 jobs last month and that the unemployment rate held at 4.2%, according to FactSet consensus estimates.
Stock futures jumped after the data release, and after the opening bell the Dow was up by 435 points, or 1%. The S&P 500 rose by 0.9% and the Nasdaq Composite was 1.1% higher.
Friday’s report painted a picture of a “steady but cautious” labor market in the face of swelling economic uncertainty, said Ger Doyle, regional president for North America at employment firm ManpowerGroup.
President Donald Trump’s sweeping policy moves, especially a whipsaw approach to massive import tariffs, have driven consumer sentiment lower, rattled markets and clouded businesses’ lines of sight.
“This is not a freeze, but a temporary chill,” he wrote in commentary Friday. “Employees are staying put, employers are holding steady, and everyone is waiting for clearer signs.”
While the pace of job growth remains fairly solid, this year’s gains were even softer than initially thought, Friday’s report showed.
March’s and April’s gains were revised down by a combined 95,000 jobs, resulting in employment increasing by an average monthly clip of nearly 124,000 jobs this year.
That may be above the 100,000 threshold (below which would be an indicator of potential weakness), but, excluding recession years, it’s the lowest average monthly gain for January through May in the past 30 years, an analysis of BLS data shows.
‘Waiting for the other shoe to drop’
In the years following the economy-upheaving pandemic, job growth has slowed, but it has not collapsed. The gains have remained solid enough to fuel consumer spending and put the economy on track for a “soft landing” of reining in inflation without triggering a recession.
However, economists have warned that the Trump administration’s frenetic trade policy and other actions — including drastic cutbacks to federal spending, layoffs of government workers, and reductions in immigration — not only threaten those soft landing odds but also heighten recession risks.
“The May jobs report still has everyone waiting for the other shoe to drop,” Daniel Zhao, Glassdoor’s lead economist, wrote Friday. “This report shows the job market standing tall, but as economic headwinds stack up cumulatively, it’s only a matter of time before the job market starts straining against those headwinds.”
Not knowing the size and breadth of tariffs (but knowing they very well might change), for example, has hindered businesses’ abilities to operate and plan: They don’t know what their costs will be in three months, let alone three days from now; and it’s even more unclear whether consumers will keep spending.
Outlooks have quickly become opaque.
Scores of the largest public US companies have suspended their forecasts for future earnings, temporarily blinding analysts and investors. And small businesses that have little room for error have been left frozen in their tracks.
Although layoffs remain low, hiring has slowed and workers are staying put, slowing the all-important “churn” behind a healthy labor market.
This story is developing and will be updated.