U.S. Job Growth Beats Expectations in May, Unemployment Holds Steady at 4.2%

The U.S. labor market showed resilience in May, adding 139,000 nonfarm jobs despite looming tariffs and fears of an economic slowdown, according to the Bureau of Labor Statistics. The figure topped the Dow Jones estimate of 125,000 and followed a revised 147,000 jobs added in April.

The unemployment rate held firm at 4.2%, signaling stability even as businesses and consumers brace for potential economic headwinds. Wage growth also surprised to the upside, with average hourly earnings rising 0.4% month-over-month and 3.9% year-over-year, outpacing forecasts of 0.3% and 3.7%, respectively.

Health care led the charge, adding 62,000 jobs—well above its 12-month average of 44,000. Leisure and hospitality contributed 48,000 jobs, while social assistance added 16,000. However, government payrolls took a hit, shedding 22,000 jobs as President Trump and Elon Musk’s Department of Government Efficiency began trimming the federal workforce.

Despite the solid headline numbers, cracks are showing. April’s job gains were revised down by 30,000, and March’s numbers dropped by 65,000 to 120,000. A stark contrast emerged between the establishment survey, which tracks overall job growth, and the more volatile household survey, which reported a jarring 696,000 drop in payrolls.

While recession fears remain at bay for now, sentiment surveys reveal growing unease among consumers and business leaders. Many are battening down the hatches, anticipating that tariffs will drive up inflation and disrupt business activity in the months ahead.