US Job Growth Slows: Key Sectors and What It Means for the Economy

Employers in the United States added a solid 139,000 jobs in May, though this marks a slowdown from previous months. This figure was higher than the forecast of 133,000 jobs but lower than April's 147,000 hires. Notably, the Labor Department revised downward the data for March and April by 95,000 jobs.

Sector Highlights

• Healthcare led the gains with 62,000 jobs added.
• Leisure and hospitality followed, adding 48,000 jobs, with 30,000 in food services.
• Social services added about 16,000 jobs.
• The federal government contracted 22,000 jobs.

Industries like manufacturing, wholesale trade, retail trade, transportation, and warehousing showed little change as tariff anticipation spending slowed.

Economic Indicators

• The unemployment rate held steady at 4.2 percent.
• Wages grew slightly, with the average wage increasing by 15 cents or 0.4 percent.

Mark Zandi, chief economist at Moody’s Analytics, noted, “The job market is steadily but surely throttling back. Monthly job gains are moderating, and most telling, the gains are being consistently revised lower.”

Private Sector Insights

According to payroll firm ADP, the US economy added only 37,000 jobs in May, the lowest in two years. Key losses were in:

• Manufacturing: 3,000 jobs lost.
• Natural resources and mining: 5,000 jobs lost.

These were offset by a 6,000-job gain in construction and 38,000 jobs added in leisure and hospitality.

Job Openings and Labor Turnover

The JOLTS report showed 7.4 million open jobs in April, up by 191,000 from March. However, Elise Gould, senior economist at the Economic Policy Institute, cautioned that open jobs don’t always mean they’re being filled.

Hiring Slowdowns

Major employers across sectors have implemented hiring slowdowns and freezes, including:

• American Airlines: Hiring freeze for flight attendants.
• T Rowe Price: Slowed hiring.
• Johns Hopkins University: Hiring freeze amid slowdown in research grants.

Small businesses, particularly affected by looming tariffs, reported a 4.4 percent decline in hiring compared to last year.

Looking Ahead

Key indicators to watch include housing starts and factory orders, which suggest potential job cuts in manufacturing and construction if trends continue.