Employers add a solid 139,000 jobs in May, though hiring slows as some
potential weaknesses appear
[June 07, 2025] By
PAUL WISEMAN
WASHINGTON (AP) — U.S. employers slowed hiring last month, but still
added a solid 139,000 jobs amid uncertainty over President Donald
Trump’s trade wars.
Hiring fell from a revised 147,000 in April, the Department of Labor
said Friday. The job gains last month were above the 130,000 that
economists had forecast.
Healthcare companies added 62,000 jobs and bars and restaurants 30,000.
The federal government shed 22,000 jobs, however, the most since
November 2020, as Trump's job cuts and hiring freeze had an impact. And
factories lost 8,000 jobs last month.
Average hourly wages rose 0.4% from April and 3.9% from a year earlier –
a bit higher than forecast.
There were a few signs of potential weakening. Labor Department
revisions shaved 95,000 jobs from March and April payrolls. The number
of people in the U.S. labor force – those working or looking for work –
fell by 625,000 last month, the biggest drop since December 2023. And
the percentage of those who had jobs fell last month to 59.7%, the
lowest since January 2022.
Trump’s aggressive and unpredictable policies – especially his sweeping
taxes on imports – have muddied the outlook for the economy and the job
market and raised fears that the American economy could be headed toward
recession. But so far the damage hasn’t shown up clearly in government
economic data.
“The job market is still standing tall even as some of these headwinds
start to blow,” said Daniel Zhao, lead economist at the jobs website
Glassdoor. “But ultimately we’re all still waiting for the other shoe to
drop. It’s still much too early for tariff impacts to be a significant
drag on the economy.’’
The U.S. economy and job market have proven surprisingly resilient in
recent years. When the inflation fighters at the Federal Reserve raised
their benchmark interest rate 11 times in 2022 and 2023, the higher
borrowing costs were widely expected to tip the United States into a
recession. They didn't.
Still, the job market has clearly decelerated. So far this year,
American employers have added an average of less than 124,000 a month.
That is down 26% from last year, down almost 43% from 2023, and down a
whopping 67% compared with 2022.
The modest job gains and steady unemployment rate are likely to keep the
Fed on the sidelines for at least the next few months, economists said.
The central bank Fed has kept its key short-term interest rate unchanged
this year, after cutting it three times last year.
Fed chair Jerome Powell and most other Fed policymakers have voiced
concern that Trump’s tariffs could push up inflation later this year,
which they would seek to counter by raising rates. The Fed is only
likely to accelerate interest rate cuts if the job market sharply
deteriorates. But so far hiring is holding up.
Investors still expect just two cuts by the Fed this year, starting in
September. Jim Lebenthal, chief equity strategist at Cerity Partners,
said the central bank will likely stay on hold as it waits to see
whether the sweeping tariffs that Trump imposed April 2, then delayed
until July 9, return in some form. Those duties are also being
challenged in court.
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 “They need to see the effects of the
tariffs before they make any moves,” Lebenthal said.
Recent economic reports have sent mixed signals.
The Labor Department reported Tuesday that U.S. job openings rose
unexpectedly to 7.4 million in April — seemingly a good sign. But
the same report showed that layoffs ticked up and the number of
Americans quitting their jobs fell, a sign they were less confident
they could find something better elsewhere.
Surveys by the Institute for Supply Management, a trade group of
purchasing managers, found that both American manufacturing and
services businesses were contracting last month.
And the number of Americans applying for unemployment benefits rose
last week to the highest level in eight months, though jobless
claims remain low by historical standards.
The job market has clearly decelerated. So far this year, American
employers have added an average of less than 124,000 a month. That
is down 26% from last year, down almost 43% from 2023, and a down
whopping 67% compared with 2022.
Trump’s tariffs — and the erratic way he rolls them out, suspends
them and conjures up new ones — have already buffeted the economy.
“Employers have been hoarding labor in the face of massive corrosive
uncertainty,” said Carl Weinberg, chief economist at High Frequency
Economics. “We believe firms have been reluctant to lay off workers
until they saw the extent of the Trump tariffs. Now that the tariffs
are out in the open, we believe most firms see the writing on the
wall and will start workforce reductions right now.’’
Steel Horse Leather is a Brooklyn company that makes handmade
leather bags and imports some of its material and production from
China.
Owner Dave Heaton says rapidly evolving tariff rules have made it
difficult to manage the business day to day – let alone build on his
staff of four. “With the current volatility, hiring really isn’t
something at the top of our list, unfortunately,” he said.
Heaton's company has also begun to supplement sea freight with air
shipments to secure products in time for the fall and holiday
seasons. He's raised prices 10% to 15% on some products to cover
higher shipping fees and some of the tariffs, the first price hikes
in in three years.
“The real challenge is the uncertainty,” Heaton said. “It’s not just
about the price hikes — it’s that we can’t plan ahead like we used
to.”
___
AP Economics Writer Christopher Rugaber in Washington and AP Retail
Writer Anne D'Innocenzio in New York contributed to this story.
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