The U.S. economy added 139,000 jobs in May, surpassing economists' expectations even as trade uncertainty and government workforce reductions weighed on hiring. The unemployment rate remained unchanged at 4.2%, according to data released Friday by the Bureau of Labor Statistics.
The figure exceeded the Dow Jones forecast of 125,000 jobs, though it marked a slight decline from the 147,000 jobs added in April, which was revised downward. Job growth remained resilient despite volatility in trade policy and a series of federal cutbacks under President Donald Trump.
Average hourly earnings climbed 0.4% over the month and 3.9% compared to a year earlier, outpacing forecasts of 0.3% and 3.7%, respectively, indicating continued wage strength in a tight labor market.
Nearly half of May's job gains came from the healthcare sector, which added 62,000 positions-well above its 12-month average of 44,000. The leisure and hospitality sector added 48,000 jobs, while social assistance posted a gain of 16,000.
In contrast, government employment declined by 22,000, reflecting the Trump administration's campaign to streamline federal agencies. The layoffs, spearheaded by the Department of Government Efficiency (DOGE) under Elon Musk, have resulted in nearly 60,000 job cuts since January.
The data comes as Federal Reserve officials monitor the labor market for signs of fallout from escalating trade tensions. Earlier in May, tariffs on Chinese imports peaked at 145% before the administration agreed to a temporary truce that lowered levies to 30% for 90 days.
President Trump's hour-long call this week with Chinese President Xi Jinping was seen as a potential turning point after earlier trade talks had stalled.
