CNN
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\n The long-resilient labor market slowed down a little in May, adding 139,000 jobs, according to Bureau of Labor Statistics data released Friday.\n <\/p>\n
\n Last month\u2019s job gains, which came in slightly more than expected, marked a retreat from April<\/a>, which was downwardly revised to 147,000.\n <\/p>\n \n The unemployment rate held steady at 4.2%, and wage gains continued to outpace inflation.\n <\/p>\n \n Those two numbers on their own \u2014 the monthly payroll gain and the unemployment rate \u2014 indicate that the US labor market is cooling and not collapsing. However, the guts of the report indicate that fissures may be spreading, some economists warn.\n <\/p>\n \n \u201cI don\u2019t want to play Debbie Downer by just reading the headlines and concluding nothing to worry about,\u201d Gregory Daco, EY-Parthenon\u2019s chief economist, told CNN. \u201cIn my opinion, we are starting to see an acceleration of labor market slowdown.\u201d\n <\/p>\n \n Economists were expecting the economy to have added 130,000 jobs last month and that the unemployment rate held at 4.2%, according to FactSet consensus estimates.\n <\/p>\n \n Friday\u2019s report painted a picture of a \u201csteady but cautious\u201d labor market in the face of swelling economic uncertainty, said Ger Doyle, regional president for North America at employment firm ManpowerGroup.\n <\/p>\n \n President Donald Trump\u2019s sweeping policy moves, especially a whipsaw approach to massive import tariffs, have driven consumer sentiment lower<\/a>, rattled markets and clouded businesses\u2019 lines of sight.\n <\/p>\n \n \u201cThis is not a freeze, but a temporary chill,\u201d Doyle wrote in commentary Friday. \u201cEmployees are staying put, employers are holding steady, and everyone is waiting for clearer signs.\u201d\n <\/p>\n \n While the pace of job growth remains fairly solid, this year\u2019s gains were even softer than initially thought, Friday\u2019s report showed.\n <\/p>\n \n March\u2019s and April\u2019s gains were revised down by a combined 95,000 jobs, resulting in employment increasing by an average monthly clip of nearly 124,000 jobs this year.\n <\/p>\n \n That may be above the 100,000 threshold (below which would be an indicator of potential weakness), but, excluding recession years, it\u2019s the lowest average monthly gain<\/a> for January through May in the past 30 years, an analysis of BLS data shows.\n <\/p>\n \n In the years following the economy-upheaving pandemic, job growth has slowed, but it has not collapsed. The gains have remained solid enough<\/a> to fuel consumer spending and put the economy on track for a \u201csoft landing\u201d of reining in inflation without triggering a recession.\n <\/p>\n \n May\u2019s jobs report marks the 53rd consecutive month that the US economy has added jobs, the second-longest streak of employment expansion on record (behind the post-Great Recession\/pre-Covid market of late-2010 to early 2020), BLS data shows.\n <\/p>\n \n However, economists have warned that the Trump administration\u2019s frenetic trade policy<\/a> and other actions \u2014 including drastic cutbacks to federal spending, layoffs of government workers<\/a>, and reductions in immigration \u2014 not only threaten those soft landing odds but also heighten recession risks.\n <\/p>\n \n \u201cThe May jobs report still has everyone waiting for the other shoe to drop,\u201d Daniel Zhao, Glassdoor\u2019s lead economist, wrote Friday. \u201cThis report shows the job market standing tall, but as economic headwinds stack up cumulatively, it\u2019s only a matter of time before the job market starts straining against those headwinds.\u201d\n <\/p>\n \n Not knowing the size and breadth of tariffs (but knowing they very well might change), for example, has hindered businesses\u2019 abilities to operate and plan: They don\u2019t know what their costs will be in three months, let alone three days from now; and it\u2019s even more unclear whether consumers will keep spending.\n <\/p>\n \n Outlooks have quickly become opaque.\n <\/p>\n \n Scores of the largest public US companies have suspended their forecasts<\/a> for future earnings, temporarily blinding analysts and investors. And small businesses that have little room for error have been left frozen in their tracks<\/a>.\n <\/p>\n \n Although layoffs remain low, hiring has slowed<\/a> and workers are staying put<\/a>, slowing the all-important \u201cchurn\u201d behind a healthy labor market.\n <\/p>\n \n \u201cThe labor market is revealing fragility,\u201d Diane Swonk, chief economist at KPMG, told CNN in an interview. \u201cThere\u2019s no margin for error when you\u2019ve got a low pace of hiring, a low pace of quits.\u201d\n <\/p>\n \n Friday\u2019s jobs report showed that opportunities dwindled for many workers. Almost the entirety of the month\u2019s employment gains (nearly 91%) was concentrated in just two sectors: health care and social assistance, and leisure and hospitality.\n <\/p>\n \n Half of all major industries added jobs in May (or lost jobs, if one\u2019s a glass-half-empty type of person), according to the BLS\u2019 employment \u201cdiffusion index.\u201d Across manufacturing, only 41.7% of industries added jobs.\n <\/p>\n \n \u201cWhen manufacturing is losing jobs and the diffusion index suggests those losses are broad, it\u2019s more indicative of an industry-wide phenomenon, and could warrant concern for the broader economy,\u201d Elizabeth Renter, NerdWallet\u2019s senior economist, wrote in a note Friday.\n <\/p>\n