Jobs Increase by 139,000 in May; Unemployment Remains Flat

(Image courtesy of BLS; Breakout image courtesy of Andrea Piacquadio/pexels.com)

Total nonfarm payroll employment increased by 139,000 in May, with the unemployment rate flat at 4.2%, the U.S. Bureau of Labor Statistics reported.

Employment trended up in health care, leisure and hospitality, and social assistance. The federal government continued to shed jobs.

The change in nonfarm payroll employment for March was revised down by 65,000, from 185,000 to 120,000. The change for April was revised down by 30,000, from 177,000 to 147,000.

“All in, the job market is softening, but not quickly,” Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni said. “Wage growth remains relatively steady at 3.9% over the past year.  At some point, we would expect wage growth to decelerate further if the unemployment rate begins to rise, moving bargaining power from employees to employers.

“These data lined up well with market expectations and are likely to keep the Federal Reserve on hold for the next meeting or two,” he continued. “If the job market does weaken further this summer, as MBA forecasts, there will likely be two cuts to the federal funds target this year.”

“The May jobs report beat expectations, adding 139,000 jobs, but downward revisions to the March and April report temper the gain. May marks the second-strongest monthly gain of 2025–a decent showing as employers navigate through a fog of uncertainty,” said First American Chief Economist Sam Williamson.

 “The solid jobs data will disappoint the housing market looking for signs of looming interest rate cuts, as the data supports the Fed’s view of a still-resilient labor market, likely extending the Fed’s ‘wait-and-see’ stance on rate cuts as inflation remains the top concern,” Williamson noted.