A summary of the U.S. Bureau of Labor Statistics May 2025 Employment Report
The U.S. economy added 139,000 jobs in May, according to the Bureau of Labor Statistics (BLS) survey of employers. The increase was slightly above consensus expectations for a gain of 126,000. However, the prior two months were revised down by a cumulative 95,000. Employment “continued to trend up in health care, leisure and hospitality, and social assistance. Federal government continued to lose jobs”, according to BLS. The diffusion index — a measure of the breadth of job gains across all industries — stood at 50%, down from 61% at the beginning of the year. The same measure for manufacturing industries fell to 41.7%.
The BLS’s survey of households reported the unemployment rate at 4.2% in May, unchanged from April. The labor force participation rate fell, and there were large declines in the number employed and in the labor force. The number of unemployed in the household survey rose for the fourth month in a row. Average hourly earnings — a proxy for wage growth — rose 0.4% for the month and 3.9% vs. a year ago. Both figures were above consensus estimates.
On balance, this report confirms that the job market continues to soften, but has not descended into recessionary territory. In many ways, this data sums up the Federal Reserve’s dilemma. The weakish tinge to the employment data is countered by an acceleration of wage growth and concerns that tariffs may push inflation measures higher in the second half of the year. Futures markets anticipate very low odds of a rate cut at the FOMC’s late July meeting, and slightly more than a 50/50 chance of a rate cut at the September meeting.
Source: US Bureau of Labor Statistics
