Jobs continued to see growth in May, albeit at a slower rate than previous months, as the unemployment rate remained steadfast, according to the latest Employment Situation Summary from the U.S. Bureau of Labor Statistics.
The latest Jobs report saw employment grow by 139,000 jobs in May, down from 177,000 jobs in April but still a solid growth rate. The unemployment rate remained unchanged at 4.2%.
“The May report indicates that the pace of job growth has slowed slightly, but overall labor market conditions still seem solid, despite growing economic uncertainty,” said Dr. Lisa Sturtevant, chief economist at Bright MLS.
Positive changes were seen again in healthcare, leisure and hospitality and social assistance, while the federal government continued to lose jobs.
Health care added 62,000 jobs, higher than the average monthly gain of 44,000 over the prior 12 months. Job gains occurred in hospitals (30,000), ambulatory health care services (29,000) and skilled nursing care facilities (6,000).
Employment in leisure and hospitality grew by 48,000 jobs, largely in food services and drinking places (30,000). Over the prior 12 months, leisure and hospitality has added an average of 20,000 jobs per month.
Social assistance employment grew by 16,000 jobs, with continued growth in individual and family services (16,000).
On the other hand, federal government employment declined by 22,000 jobs, and is down by 59,000 since January (employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey).
In terms of wages, average hourly earnings for private nonfarm payroll employees grew by 0.4% to $36.24. Wages are now up 3.9% over the past 12 months. Wages for private-sector production and nonsupervisory employees rose by 0.4% to $31.18
Sturtevant posed the question on many minds: “What does today’s jobs report mean for the housing market?”
“Like so many things in today’s economy, the answer is not clear,” she explained. “Slower job growth could mean the Federal Reserve will cut interest rates sooner than expected in order to ward off a recession. More broadly, slower job growth and more economic uncertainty can erode consumer confidence.”
Sturtevant said that her prediction is that if the labor market continues to cool, “the Fed will cut the Federal funds rate in September and in most markets, lower mortgage rates will unleash housing demand that has been pent up for the last couple of years, increasing home sales activity in the latter part of 2025.
MBA SVP and Chief Economist Mike Fratantoni agreed with Sturtevant’s sentiment, saying that the Fed will probably continue to be on hold for one or two more meetings.
“If the job market does weaken further this summer, as MBA forecasts, there will likely be two cuts to the federal funds target this year,” he continued.
