Healthcare and the leisure and hospitality sectors drove payroll expansion in May. Here are the five things we learned from U.S. economic data released during the week ending June 6.
Payrolls moderately expanded in May. Nonfarm payrolls grew by a seasonally adjusted 139,000, between March and April gains of 120,000 and 147,000, respectively, for the Bureau of Labor Statistics measure. The data from the two prior months reflected a combined downward revision of 95,000. The private sector added 140,000 workers, with service sector payrolls expanding by 145,000. Reporting the largest gains were health care/social assistance (+78,300) and leisure/hospitality (+48,000). Government payrolls narrowed by 1,000, as local government (+21,000) largely counterbalanced a 22,000 decline in federal government employment. Average weekly earnings of $1,243.03 were up 3.9 percent from a year earlier.
A separate household survey kept the unemployment rate at 4.2 percent, as a 625,000 decline in the labor force closely paced a 696,000 drop in the number of employed people. The labor force participation rate decreased by 2/10ths of a percentage point to 62.4 percent. The 25-54 participation rate also fell by 2/10ths of a percentage point to 83.4 percent. The median length of unemployment fell by 9/10ths of a week to 9.5 weeks, while the number of part-time workers “for economic reasons” narrowed by 66,000 to 4.690 million. The broadest measure of labor underutilization (U-6 series) held steady at 7.8 percent.
Job openings and hiring edged up in April. The Bureau of Labor Statistics reports that there were a seasonally adjusted 7.391 million unfilled jobs, up 191,000 for the month but down 3.0 percent from the same time last year. The private sector sought to fill 6.544 million positions, including a million-plus open jobs in professional/business services, healthcare/social assistance, and trade/transportation/utilities. Further, there were 381,000 unfilled manufacturing jobs at the end of April. Employers hired 5.573 million workers, up 169,000 from March and flat from a year earlier. Private-sector employers hired 5.215 million people. 5.288 million people separated from their jobs in April, up 105,000 for the month but down 1.9 percent from a year earlier. This included 3.194 million people who quit their jobs (-150,000 versus March 2025) and 1.786 million laid off (+196,000 versus March 2025).
Manufacturing slowed in May. The Manufacturing PMI slipped by 2/10ths of a point to 48.5. The Institute for Supply Management measure has been below 50.0—indicative of a contracting manufacturing sector—for three consecutive months (and 29 of the past 29 months). Indices grew (but remained below 50.0) for new orders, production, and employment. The inventories metric declined. Only seven manufacturing industries reported growth, led by plastic/rubber products, nonmetallic mineral products, and petroleum/coal products.
The service sector contracted for the first time in a year. The Services PMI dropped 1.7 points in May to 49.9. The Institute for Supply Management had not been below 50.0 since June 2024 and had only been below the expansion-contraction threshold four times over the past five years. The business activity/production, new orders, and inventories indices declined while the employment measure improved. Ten service sector industries reported growth during the month, led by accommodation/food services, entertainment/recreation, and public administration. The press release stressed that the Services PMI drop was “not indicative of a severe contraction, but rather uncertainty” expressed by survey respondents.
The trade deficit fell sharply in April. Exports rose 3.0 percent to a seasonally adjusted $289.4 billion, while imports plummeted 16.3 percent to $351.0 billion. The resulting trade deficit of -$61.6 percent puts the Census Bureau and Bureau of Economic Analysis metric down 55.5 percent from March. The year-to-date trade deficit (-$452.2 billion) was up 65.7 percent from the comparable 2024 months. The goods deficit contracted by $75.2 billion to -$87.4 billion, while the services surplus swelled by $1.5 billion to +$25.8 billion. Exports grew for finished metal shapes, nonmonetary gold, and computers but fell for vehicles and crude oil. Imports fell sharply for pharmaceuticals, cell phones, finished metal shapes, precious metals, and vehicles. The U.S. had its largest goods deficits with the European Union, China, and Mexico.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending May 31, 2025, First-Time Claims, seasonally adjusted): 247,000, +8,000 vs. the previous week, +18,000 vs. the same week a year earlier). 4-week moving average: 235,000 (+5.9% vs. the same week a year earlier).
- Vehicle Sales (May 2025, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.646 million (-9.3% vs. April 2025; -1.1% vs. May 2024).
- Factory Orders (April 2025, New Orders for Manufactured Goods, seasonally adjusted): $594.6 billion (-3.7% vs. March 2025; +6.5% vs. April 2024).
- Construction Spending (April 2025, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.162 trillion (+0.4% vs. March 2025; -0.5% vs. April 2024).
- Productivity (2025Q1-Revised, Nonfarm Business Productivity, seasonally adjusted annualized rate): -1.5% vs. 2024Q4; +1.3% vs. 2024Q1.
- Consumer Credit (April 2025, Outstanding Non-Real Estate Consumer Credit Balances, seasonally adjusted): $5.011 trillion (+$17.9 billion vs. March 2025; -0.8% vs. April 2024).
- Beige Book
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What We Learned About the U.S. Economy Last Week 