The American job market continued its upward momentum in May, adding 139,000 new jobs—beating Wall Street projections and signaling enduring strength in the post-COVID economy. The unemployment rate held steady at 4.2%, as key industries expanded and wage growth accelerated.
Economists had forecast around 125,000 jobs for the month, but the labor market outperformed expectations even amid lingering inflation concerns and uncertainty over tariffs. Though job gains for March and April were revised down by a combined 95,000, the May numbers more than made up for the dip, reinforcing confidence in the economy’s underlying resilience.
Healthcare and Hospitality Lead the Charge
The biggest gains came from the healthcare sector, which added 62,000 jobs in May—driven by growing demand for medical professionals and aging population needs. Leisure and hospitality followed close behind, with 48,000 new jobs as Americans returned to restaurants, hotels, and entertainment venues in full force. Social assistance services also rose by 16,000, bolstering community and support infrastructure.
In contrast, the federal government shed 22,000 jobs, part of a broader effort by the Trump administration to streamline Washington bureaucracy and reduce overhead spending. The cuts align with President Trump’s larger vision of a leaner, more efficient federal workforce.
Wages Rise, But Labor Force Shrinks
Average hourly earnings climbed 0.4% in May, pushing the national average to $36.24—up 3.9% year-over-year. However, the labor force participation rate dipped to 62.4%, with 625,000 fewer Americans counted in the workforce. The drop has raised concerns about long-term labor engagement and potential disincentives to work amid generous welfare benefits in blue states.
Markets Cheer, But Fed Remains Cautious
Financial markets rallied in response to the report. The S&P 500 jumped nearly 1%, the Dow gained over 340 points, and tech-heavy Nasdaq surged 1.2%—fueled in part by rebounds in major tech stocks.
Despite the strong job report, the Federal Reserve is expected to hold interest rates steady for now, citing persistent inflation pressures and the uncertain impact of ongoing tariff negotiations. President Trump has publicly called on the Fed to lower rates by a full percentage point to support American growth, accusing the central bank of dragging its feet.
Conclusion
The May jobs report delivers another round of good economic news under Trump-era reforms, with job creation thriving in critical sectors, wages ticking up, and investors showing renewed confidence. While challenges remain in labor force participation and inflation, the overall trajectory points to an economy that remains hot—and getting hotter.