The U.S. economy added 139,000 jobs in May

The May jobs report paints a complex picture of the current labor market as nonfarm payrolls increased by 139,000.

Key takeaways for employers:

• Hiring is stable but slowing compared to 2024's pace.

• Competition for talent remains stiff due to limited slack in the market.

• Employers must be agile in attracting the right talent—especially in growing industries.

Unemployment & Labor Force Participation

The unemployment rate stayed flat at 4.2% for the third consecutive month. This consistency shows a resilient job market but also highlights the difficulty in bringing additional workers back into the labor force. The teen unemployment rate increased to 13.4%, showing volatility in entry-level hiring.  Managers should consider hiring strategies like internships and apprenticeships to alleviate resource issues while building future talent pools.

Despite more job openings, the labor force participation rate fell slightly to 62.4%. This suggests lingering challenges in re-engaging discouraged or sidelined workers.

The long-term unemployed declined significantly, suggesting that re-engagement is happening but marginally attached and discouraged workers remained largely unchanged.

Industry-Specific Job Gains and Losses

Healthcare, Leisure & Hospitality, and Social Assistance sectors lead the growth in jobs:

• Healthcare: (+62K) - robust hiring across hospitals, ambulatory services and skilled nursing

• Leisure and Hospitality: (+48K) - gains driven by food services and drinking establishments

• Social Assistance: (+16K) - indicating more demand for community support roles.

Organizations competing for similar skill sets—particularly in caregiving, customer service, and human services—must recognize cross-industry competition. Talent with soft skills, emotional intelligence, and adaptability is in high demand.

As expected, Federal government employment declined by 22,000 jobs in May for a year-to-date decline of 59,000 jobs. May cuts were mostly offset by state and local government adding 21,000 jobs.

Professional/business services declined (-18,000 jobs) with a significant drop in temporary help services specifically (-20,200). This suggests cautiousness among employers in hiring contract talent amid economic uncertainty

Employment was flat in other major sectors–manufacturing, construction, wholesale/retail trade, information, transportation and warehousing–suggesting broad stability outside key growth areas.

Earnings and Workweek Trends

Average hourly earnings rose by $0.15 (0.4%) in May, reaching $36.24. Over the past year, wages are up 3.9%, keeping pressure on employers to maintain competitive compensation. The average workweek remained at 34.3 hours, suggesting businesses are not yet expanding labor demand through overtime or longer shifts.

While wage inflation is slowing, it is persistent. Compensation benchmarking should remain a quarterly practice. Employees are valuing work-life balance; flexibility and benefits may offer a stronger pull than incremental pay increases alone.

Overall Outlook

The June 2025 Jobs Report highlights a labor market in motion: stable yet shifting, tight but full of opportunity. For hiring managers and TA professionals, the next quarter demands proactive strategy, candidate-centric practices, and data-driven talent forecasting. By staying responsive to labor market data and leading with insight, your organization can not only compete—but win—in the race for talent.

As the hourly expert, Snagajob is here to help with your hiring needs. Contact our team today to learn more about our solutions for enterprise, mid-size, and small businesses.