US economy adds 139,000 jobs amid signs of slowing growth.

In the most recent labor market report from the United States, employers demonstrated a notable slowdown in hiring, even as the economy witnessed the addition of 139,000 jobs in May. This figure exceeded the anticipated gain of 133,000 jobs but represented a decrease from April’s count of 147,000 hires. The Labor Department’s data, released on a recent Friday, also included a significant downward revision of 95,000 jobs in the data for March and April, indicating changing economic dynamics.

The report highlighted substantial employment growth in the healthcare industry, which accounted for 62,000 of the newly created positions, followed by the leisure and hospitality sector that added 48,000 jobs, with food services constituting 30,000 of that total. Additionally, the social services sector contributed approximately 16,000 jobs, although a noteworthy decline was observed in federal government employment, which contracted by 22,000 jobs during the same period.

Meanwhile, industries such as manufacturing, wholesale trade, retail trade, and transportation and warehousing showed minimal changes, attributed to a reduction in spending amid ongoing trade tensions. The unemployment rate remained steady at 4.2 percent, while wages displayed a modest increase of 15 cents, or 0.4 percent.

Experts have voiced concerns regarding the fragility of the job market and economy, suggesting that the steady decline in monthly job gains, coupled with downward revisions, paint a cautionary picture. Mark Zandi, chief economist at Moody’s Analytics, conveyed that the monthly job gains might be approaching the 100,000 mark post-revisions, indicating a trend of moderation.

An additional report from ADP, a payroll processing firm, revealed that the U.S. economy added only 37,000 jobs in May, marking the lowest monthly growth in two years. This report offered a more immediate perspective compared to the Labor Department’s data. The private sector losses were particularly pronounced in manufacturing and natural resources, contributing to a nationwide atmosphere of hiring caution as businesses respond to external pressures, including trade uncertainties.

Despite these challenges, there were positive indicators in some sectors. The leisure and hospitality industry, often characterized by lower pay rates, saw a net gain of 38,000 positions, while financial services added an additional 18,000 jobs. However, these gains were overshadowed by losses in educational and health services, and the trade and transportation sectors.

The Job Openings and Labor Turnover Survey (JOLTS), capturing data with a lag, reported 7.4 million open jobs in April, reflecting a modest month-over-month increase. However, this statistic underscores a growing hesitation among employers and job seekers, as many companies have enacted hiring slowdowns or freezes. For instance, prominent names like American Airlines and T Rowe Price have taken steps to pause hiring amid uncertain market conditions.

Given the evolving economic landscape, analysts emphasize the importance of monitoring key indicators such as housing starts and factory orders, which could signal further job cuts if trends continue. The decline in residential home construction for three consecutive months and a significant drop in factory orders suggest a cautious approach among builders and consumers.

As the U.S. labor market navigates these complexities, careful observation of these trends will be critical in understanding the future trajectory of employment and economic stability.

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