The U.S. labor market added 139,000 jobs in May 2025, signaling a further slowdown in hiring as the unemployment rate remained unchanged at 4.2%. Job growth was led by gains in healthcare, hospitality, and social assistance, while sectors like construction, retail, and manufacturing showed little movement. Long-term unemployment declined to 1.5 million, but labor force participation and the employment-population ratio both fell, suggesting weaker engagement across the workforce. Federal employment continued its downward trend, with 22,000 jobs lost in May and 59,000 eliminated since January. Despite a solid uptick in wage growth, downward revisions to March and April job gains and softening participation rates point to growing headwinds in the labor market.

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