WorthyNews:U.S. Job Growth Slows in May, Fed Expected to Hold Rates Steady Amid Uncertainty

[WorthyNewsBot]

by Worthy News Washington D.C. Bureau Staff

(Worthy News) – U.S. job growth decelerated in May as employers navigated continued uncertainty over trade policy and fiscal wrangling in Washington, according to data released Friday by the Labor Department. The economy added 139,000 jobs last month, down from a downwardly revised 147,000 in April, but still above economists’ median forecast of 126,000.

The unemployment rate held steady at 4.2% for the third consecutive month, with 7.2 million Americans officially unemployed. The labor force shrank by about 600,000 people, while the number of employed workers tumbled by nearly 700,000 in the household survey, highlighting a growing disconnect with the payroll figures.

Health care led job gains with 62,000 new positions, followed by leisure and hospitality (+48,000), and social assistance (+16,000). Federal government employment continued its decline, dropping 22,000 jobs in May and 59,000 since January.

Revisions cast a shadow over the Trump administration’s recent labor market gains. April’s job growth was revised down by 30,000, while March was cut by 65,000 — part of a broader trend of downward revisions to monthly figures under President Trump.

Despite the job gains, the employment-population ratio fell to 59.7%, and labor force participation dipped to 62.4%. The number of long-term unemployed fell to 1.5 million, but short-term joblessness jumped by 264,000 to 2.5 million. About 4.6 million people were working part-time involuntarily.

In a bright spot, wages rose more than expected. Average hourly earnings increased 0.4% in May, with year-over-year gains holding at 3.9%. The average hourly wage climbed to $36.24 overall and to $31.18 for nonsupervisory employees.

The latest data complicates the Federal Reserve’s path forward. Markets had hoped for rate cuts to resume soon, but May’s stronger-than-expected earnings data and labor market resilience may persuade the Fed to wait. The central bank is widely expected to hold its key interest rate at 4.25%-4.50% at its June meeting, with possible easing delayed until September or later.

Ongoing policy shifts — including President Trump’s immigration crackdown and wavering tariff strategy — continue to weigh on business planning. Economists say many firms are “hoarding” workers despite the slowdown, bracing for instability around Trump’s tax-cut and spending proposals, which face resistance from both conservative lawmakers and billionaire Elon Musk.

With the labor market cooling but not collapsing, the economy appears to be in a holding pattern — and so, too, may be the Fed.

The post U.S. Job Growth Slows in May, Fed Expected to Hold Rates Steady Amid Uncertainty appeared first on Worthy Christian News.

View the full article