Research
June 06, 2025

Total U.S. jobs

U.S. Labor Market Shows Solid Job Gains in May Despite Signs of Cooling

The U.S. economy added 139,000 nonfarm payroll jobs in May, following a revised gain of 147,000 in April and slightly above the consensus estimate of 125,000. Revisions to March and April lowered prior estimates by a combined 95,000 jobs. Over the past five months, job gains have averaged 124,000 per month—signaling a cooler, but still solid, labor market. May also marked the 53rd consecutive month of employment growth.

Total nonfarm employment now stands at a record 159.56 million, surpassing the pre-pandemic peak from February 2020 by 7.27 million jobs—a 4.8% increase over the past five years.

While economic uncertainty continues to weigh on sentiment and business activity, there are still signs of resilience. Consumers tend to spend more when supported by steady employment and wage growth, and the labor market’s ongoing strength may offer reassurance to restaurant operators looking to drive traffic and sales. Even so, labor market data will be closely watched in the months ahead for signs of how conditions evolve amid shifting policy dynamics.

The unemployment rate was unchanged at 4.2% in April for the third straight month, though it remains low by historical standards. Despite an encouraging overall report, the number of unemployed individuals increased from 7.17 million to 7.24, the highest since October 2021.

At the same time, the number of employed individuals slipped from a record 163.94 million to 163.27 million, and the labor force participation rate eased from 62.6% to 62.4%, a 3-month low.

Average hourly earnings for private-sector production and nonsupervisory workers rose 0.4% in May, up from a 0.3% gain in April. Wages increased 4.0% year-over-year—a solid pace of growth. Even so, labor cost pressures have moderated significantly from the recent peak of 7.0% in March 2022.

Job growth in May was mixed across sectors. Notable gains occurred in private education and health services, leisure and hospitality (including eating and drinking places), local government, and financial activities. In contrast, employment declined in the federal government, manufacturing, mining and logging, and professional and business services. The private sector added 140,000 jobs, while government employment dipped slightly by 1,000. Below is a detailed breakdown of May’s employment changes by sector, ranked from highest to lowest:
  • Private education and health services: +87,000
  • Leisure and hospitality: +48,000 (eating and drinking places: +30,200)
  • Local government: +21,000
  • Financial activities: +13,000
  • Other services: +9,000
  • Construction: +4,000
  • Trade, transportation, and utilities: +4,000 (retail trade: -6,500)
  • Information: +2,000
  • State government: unchanged
  • Mining and logging: -1,000
  • Manufacturing: -8,000
  • Professional and business services: -18,000
  • Federal government: -22,000

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