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US Job Growth Slows in May Amid Trade War Uncertainty

6/6/2025
The US economy added only 139,000 jobs in May, showing signs of slowdown as businesses navigate uncertainty from the ongoing trade war. The unemployment rate remained steady at 4.2%, but federal job cuts raise concerns.
US Job Growth Slows in May Amid Trade War Uncertainty
In May, the US economy added fewer jobs than expected, with a steady unemployment rate of 4.2%. Federal job cuts and trade war uncertainties contribute to the slowdown.

The US Economy Adds 139,000 Jobs in May: A Detailed Analysis

In May, the US economy added just 139,000 jobs, marking a significant slowdown compared to previous months. This decline in job creation comes as American businesses face ongoing uncertainty due to Donald Trump’s trade war. While April's labor market data indicated a strong performance, suggesting resilience against the fluctuating trade policies from the White House, May's report revealed a disappointing drop in new employment opportunities, as reported by the Bureau of Labor Statistics.

Unemployment Rate Remains Steady

The unemployment rate held steady at 4.2%, consistent with the previous month. However, this stability is overshadowed by the loss of 22,000 federal jobs as the Trump administration implemented its “Department of Government Efficiency” (Doge) initiative to reduce government positions. Since January, a total of 59,000 federal jobs have been eliminated, contributing to the overall decline in job growth.

Revised Job Creation Figures

In a recent update, the Bureau of Labor Statistics revised the job creation numbers for March and April, reporting a decrease of 95,000 jobs created over these two months. This downward revision raises concerns about the strength and sustainability of the current labor market.

Trump's Call for Interest Rate Cuts

Following the release of the May jobs report, President Trump reiterated his call for Federal Reserve Chair Jerome Powell, whom he has derogatorily referred to as “Too Late,” to implement interest rate cuts. On Truth Social, Trump stated, “‘Too Late’ at the Fed is a disaster! Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!” This statement underscores the ongoing tensions between the administration and the Federal Reserve regarding monetary policy.

Economists Anticipate Job Market Cooling

Economists had predicted a downturn in job growth, particularly after earlier reports suggested a cooling job market. For instance, payroll firm ADP reported that private-sector payrolls increased by only 37,000 in May, the lowest gain recorded in over two years. Nela Richardson, chief economist at ADP, commented, “After a strong start to the year, hiring is losing momentum.”

Manufacturing Sector Shows Signs of Weakness

The Institute for Supply Management released its latest purchasing managers' index, which assesses the overall health of the manufacturing sector. The index reported a reading of 49.9 in April, marking the lowest level since June 2024, indicating potential contraction in manufacturing activity.

Consumer Sentiment Holds Steady

In the latest results from the University of Michigan consumer sentiment survey, released at the end of May, consumer confidence remained relatively stable from April to May. Notably, April's reading reflected the most significant drop in consumer sentiment since 1990, raising concerns about consumer spending and its impact on the overall economy.

Overall, the May jobs report highlights the challenges facing the US economy as it navigates through uncertain trade policies and a potentially cooling job market. As businesses adapt to these changes, the outlook for job growth remains cautiously optimistic, while policymakers continue to grapple with the implications of monetary policy decisions.

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