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Economic News

United States: Another Decent Month for Job Creation

June 6, 2025
Francis Généreux
Principal Economist

Highlights

  • The establishment survey showed a net gain of 139,000 jobs in May, following revised increases of 147,000 in April (previously 177,000) and 120,000 in March (previously 185,000).
  • Average hourly earnings rose by 0.4% in May, up from 0.2% in April. On a year-over-year basis, wage growth edged up from 3.8% to 3.9%.
  • The unemployment rate held steady at 4.2% in May.

Comments

Despite ongoing uncertainty stemming from the Trump administration’s trade policy and the back-and-forth on tariffs—particularly with China—the US labour market continues to show relative resilience. May’s job gains slightly exceeded consensus expectations, which stood at 126,000 according to Bloomberg.

 

However, the main downside in this report lies in the substantial downward revisions to previous months. Compared to the figures released in early May, a total of 95,000 jobs were shaved off the initially reported gains for March and April. Excluding annual benchmark revisions, this marks the largest two-month downward adjustment since October 2024.

 

In May, only 50.0% of the 250 tracked industries reported employment increases. Outside of July 2024 (which was impacted by hurricanes) and the early months of the pandemic, this is the lowest share since July 2016. Notable declines were seen in machinery manufacturing (‑7,300), residential specialty trade contractors (‑11,000), retail trade (‑6,500), and temporary help services (‑20,200). On the other hand, public sector employment continued to rise, supported by local governments, despite further losses at the federal level (‑22,000).

 

Looking ahead, it’s uncertain whether businesses will maintain the same hiring pace in the coming months. Weekly jobless claims rose in the second half of May, and if this trend continues into June, it could point to softer job creation. Consumer confidence regarding job availability also remains relatively subdued. Much will depend on how businesses respond to the prevailing uncertainty.

Implications

The US labour market remains on solid footing. While downside risks to the economic outlook persist, there is currently little in the data to suggest the Federal Reserve should rush to cut interest rates before the end of summer—despite recent pressure from President Trump.

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