US May jobs report comes in above expectations with 139,000

The US economy added 139,000 new jobs in May, going over the 125,000 estimate from Dow Jones, based on new labor figures published Friday by the Bureau of Labor Statistics.

This small but important increase happened while the country dealt with rising tariffs and warnings of slower growth. The total for April was revised lower to 147,000, but May still showed employers haven’t completely hit the brakes yet.

The unemployment rate stuck to 4.2%, showing no change from April. And wages saw a bump. Average hourly earnings increased 0.4% in May, bringing the 12-month gain to 3.9%.

Both numbers came in slightly above expectations, which were set at 0.3% for the month and 3.7% over the year. Even with a cautious business mood, workers saw their paychecks grow faster than most economists had projected.

Health care adds jobs, federal government cuts them

Health care added the most jobs last month with a jump of 62,000, way above its average of 44,000 over the past 12 months. Leisure and hospitality brought in 48,000 new positions, while social assistance picked up 16,000. Together, these three industries accounted for most of the hiring in May, while other parts of the economy stayed flat.

But the federal government lost 22,000 jobs. This decline was tied directly to job cuts pushed by President Donald Trump and handled by the Department of Government Efficiency under Elon Musk. The latest data shows the impact of their staffing policies is finally hitting official employment numbers. This drop made the public sector one of the few areas to shrink during May.

As the numbers came out, currency markets quickly reacted. The yen dropped 0.35%, moving to 144.12 per dollar. The Swiss franc also edged down to 0.82, while sterling slipped 0.18%, resting at around $1.35 after hitting its strongest level in over three years. Even though the pound dipped, it’s still up 0.6% for the week.

Currency moves follow jobs report and global chatter

The dollar index nudged up to 98.9 after the report, but it’s still down 0.5% over the week. The euro, which had climbed after the European Central Bank made hawkish comments, slipped back 0.18% to about $1.1423.

Expectations around interest rate cuts are changing again. Traders are still eyeing a 25 basis-point cut by the end of the year, though some now believe more cuts could happen. Mark Wall, chief economist at Deutsche Bank, said, “It is still too early to judge the impact of the trade war, and the path of the trade war is in any case still inherently unpredictable.” He expects a total of 50 basis points worth of cuts from the ECB.

Meanwhile, Germany’s problems are piling up. New data showed that exports and industrial output both dropped more than expected in April. That’s a sign that the EU’s biggest economy is under pressure as global demand weakens and trade talks remain uncertain.

By Thursday evening, most currencies had rallied against the dollar. This came right after Donald Trump and Chinese President Xi Jinping held a phone call that lasted over an hour. Their conversation gave traders some hope that progress could be made on trade. But by the time the May jobs data landed Friday, most of those gains had already faded.

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