US job growth slowed in May amid uncertainty about the Trump administration’s import tariffs, but solid wage growth should keep the economic expansion on track and potentially allow the Federal Reserve to delay resuming its interest rate cuts.
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US employers added 139,000 jobs in May, a slowdown from the revised 147,000 in April, as businesses grappled with economic uncertainty triggered by President Donald Trump’s trade and fiscal policies.
While job gains outpaced economists’ expectations of 130,000, the Labor Department report released Friday also included downward revisions for March and April that erased a combined 95,000 jobs from previously reported totals.
The unemployment rate held steady at 4.2% for a third straight month. However, the stability masked deeper concerns: more than 625,000 people dropped out of the labor force, a sign that many Americans may be losing confidence in the job market. Consumer surveys also show growing pessimism about the ease of finding work if laid off.
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Hiring varied widely across sectors. Healthcare led with 62,000 new jobs, followed by bars and restaurants with 30,000. But the federal government shed 22,000 jobs—the steepest decline since November 2020—as Trump’s job cuts and hiring freeze took effect. Factories, already strained by trade uncertainty, lost 8,000 positions.
Trump’s unpredictable approach to trade—including shifting stances on tariffs—has made long-term planning difficult for businesses, economists say. Further uncertainty comes from Republican infighting over Trump’s tax-cut and spending bill, with prominent opposition from within the Senate and from billionaire Elon Musk.
Still, average hourly earnings rose 0.4% from April and were up 3.9% year-on-year, slightly stronger than expected.
Economists say President Donald Trump’s flip-flopping on import tariffs has hampered businesses’ ability to plan ahead and hire more workers. Opposition to Trum