In Chaotic Economy, Hiring Remained Steady in May

The labor market persevered in May, continuing a consistent run of job creation that is nonetheless showing signs of drag from tariffs, high interest rates and federal government downsizing.

Employers added 139,000 jobs last month, the Labor Department reported on Friday, which was about in line with economists’ expectations. The unemployment rate remained 4.2 percent.

But underneath those calm numbers, signs of turbulence are starting to come into view. Revisions showed that employers added 95,000 fewer jobs in March and April than previously reported. And President Trump’s chaotic economic policy has deterred hiring in parts of the economy that depend on international trade, as businesses stall expansion plans while awaiting any sense of stability.

The manufacturing and retail sectors cut jobs, and an earlier surge of employment in transportation and warehousing, probably driven by businesses importing ahead of new import duties, has now faded.

“It’s a bit too soon to fully assess the fallout from the tariff shock, but it’s a slow-burning deterioration of the labor market,” said Samuel Tombs, the chief U.S. economist at Pantheon Macroeconomics, a forecasting firm. “We think by the fall, you’ll see a much weaker trend emerge.”

Job growth was fueled almost entirely by health care and social assistance, which added 78,000 positions, as well as leisure and hospitality, with 48,000. Most other sectors were roughly flat. That lopsidedness suggests that growth isn’t as broad-based as economists would like. Growth in health care is driven in large part by the aging U.S. population and therefore is not always a reliable measure of the strength of the economy overall.