The latest jobs report offers a snapshot of a labor market that’s still growing—but with clear signs of slowing momentum. As employers continue to assess shifting policies, inflationary pressure, and rising costs, staying informed about labor trends remains critical for workforce planning and hiring decisions.
Here are the key takeaways from the May report:
- 139,000 jobs were added in May
- The unemployment rate remained at 4.2%
- Labor force participation declined to 62.4%
- Wages increased 0.4% month-over-month
These numbers point to a labor market that remains active—but increasingly uneven. Hiring continues in a few key sectors, while job creation has cooled elsewhere. Below, we break down the trends and offer insight into how employers can adapt as conditions continue to evolve.
Number of Jobs Available
Employers added 139,000 jobs in May, slightly above expectations but down from the revised 147,000 in April. Over the past 12 months, job growth has averaged 149,000 per month—a pace that reflects a gradually moderating labor market.
As in previous months, most gains were concentrated in a few industries:
- Health care (+62,000)
- Leisure and hospitality (+48,000)
- Social assistance (+16,000)
Growth in food service and drinking places drove the increase in leisure and hospitality roles, suggesting steady local demand. At the same time, federal government employment fell by 22,000, continuing a trend of job cuts that has reduced the federal workforce by 59,000 since January.
Temporary help services—often viewed as a leading indicator of employer confidence—shed another 20,000 jobs in May. Employment in manufacturing also declined (-8,000), a signal that some employers may be responding to early impacts of new tariffs.
Unemployment
The unemployment rate remained unchanged at 4.2% for the third consecutive month. That marks a full year of stability in the 4.0–4.2% range. The total number of unemployed people held steady at 7.2 million.
However, labor force participation fell slightly to 62.4%, and the employment-to-population ratio declined to 59.7%—suggesting fewer people are actively working or looking for work. While long-term unemployment dropped in May, the number of people jobless for less than five weeks increased by 264,000, indicating some recent volatility.
Wage Growth and Workforce Participation
Average hourly earnings rose by 0.4% in May and by 3.9% year over year—higher than forecasted and still above inflation. This wage growth supports household spending but could increase business costs in some sectors, particularly in industries already affected by supply disruptions or trade policy.
Labor force participation dipped in May for the first time in several months, signaling that more people may be stepping out of the workforce or facing challenges re-entering.
Economic Variables to Keep an Eye On
While the labor market hasn’t seen a sharp downturn, signs of cooling are becoming more apparent. Here are a few variables worth watching:
- Tariffs and trade policy. Impacts are beginning to show—particularly in manufacturing and sectors tied to global supply chains. The full effect may surface later this year.
- Federal workforce changes. Ongoing government job losses could have ripple effects in surrounding industries and regions.
- Job search dynamics. Some jobseekers are spending more time looking for full-time roles or turning to multiple part-time jobs to make ends meet—reflecting increased pressure in parts of the labor market.
Even subtle shifts in the market can create ripple effects. Staying flexible helps employers adapt as conditions evolve.
Winning Moves for Employers
The job market remains active, but both hiring and job search timelines are stretching as uncertainty continues to shape employer decision-making.
Here are three strategic moves to help you stay ahead:
- Prepare for delayed effects. While May’s data shows continued job growth, broader impacts from rising tariffs and policy shifts may take time to unfold. If your business touches manufacturing, logistics, or trade, now is the time to assess where rising costs or shifting demand could affect your workforce—and begin planning accordingly.
- Refine your hiring strategy—don’t pause it. It’s common to slow or freeze hiring in uncertain times—but pulling back too far can leave you short-staffed when demand returns. Focus on your most critical roles, revisit job requirements, and streamline your process to reach qualified candidates more efficiently—especially as job searches are taking longer for many workers.
- Use staffing to stay agile. When conditions are hard to predict, staffing solutions offer built-in flexibility. Temporary and contract support lets you scale your workforce in response to real-time demand—without the long-term overhead.
Need Support Navigating What’s Ahead?
Whether you’re adjusting your workforce strategy, filling urgent roles, or planning ahead for what’s next, Verstela is here to help. Our team stays on top of labor market trends and local hiring conditions so you can make informed decisions—and find the right people, right when you need them.
Looking for more insights? Visit our Employer Resource Center for practical tools, hiring tips, and market updates.
