Employers in the United States have slowed hiring even though they added a solid 139,000 jobs in May.

While that was higher than the forecast of 133,000 jobs, it was lower than the 147,000 hires in April,  Labor Department data released on Friday showed. It also sharply revised downward the data for March and April by 95,000 jobs.

Recommended Stories

list of 4 items

list 4 of 4

Trump v Musk: How did we get here?

end of list

The US Labor Department said the biggest gains were in the healthcare industry which added 62,000 jobs; followed by the leisure and hospitality sector which added 48,000, 30,000 of which were in food services.

The social services sector followed suit, adding about 16,000 jobs. The federal government contracted 22,000 jobs.

Industries including manufacturing, wholesale trade, retail trade, transportation and warehousing showed little change as tariff anticipation spending slowed.

The unemployment rate held steady at 4.2 percent. Wages ticked up slightly. The average wage grew by 15 cents or 0.4 percent.

“The job market is steadily but surely throttling back. Monthly job gains are moderating, and most telling, the gains are being consistently revised lower, and not by a little bit. Indeed, after revision, monthly job gains appear to be closing in on 100,000,” Mark Zandi, chief economist at Moody’s Analytics, told Al Jazeera.

Advertisement

“It [the jobs report] does signal the job market and economy are increasingly fragile as the fallout from the global trade war intensifies.”

Private payrolls also tumbled this month, according to payroll firm ADP in a report on Wednesday, which showed the US economy added only 37,000 jobs, the lowest in two years. Unlike the Labor Department report which lags by a few weeks, this report is more immediate.

“After a strong start to the year, hiring is losing momentum,” Nela Richardson, chief economist at ADP, said in a release.

What was particularly notable about the ADP report was the set of industries with net job losses. The manufacturing sector recorded a net loss of 3,000. Natural resources and the mining industry lost 5,000. Those losses in the goods-producing sectors were offset by a job gain of 6,000 in construction.

The only substantive gains were in the leisure and hospitality sector, a notoriously low-paying sector, which added 38,000, according to ADP. Financial services followed in the gains, adding 18,000 jobs. However, those gains were offset by losses, including in education and health, which cut 13,000 jobs. The trade and transportation and utilities sector cut 4,000 jobs.

Last month, the ADP report showed 62,000 jobs were added, in stark contrast to the Labor Department’s 147,000, because it is considered a more immediate measure.

Job openings and labour turnover 

On Tuesday, the job openings and labour turnover survey or JOLTS report, which captures data at a significant lag to the Labor Department and ADP, showed there were 7.4 million open jobs in April, up roughly 191,000 from the month before.

Advertisement

But just because jobs are open does not mean they are being filled, according to Elise Gould, senior economist at the Economic Policy Institute.

“I think that reflects some cautiousness on the part of both employers and workers,” Gould told Al Jazeera.

While job openings in sectors like trade, transportation and utilities increased, hiring actually decreased.

This comes as major employers have implemented hiring slowdowns and freezes across sectors.

American Airlines reportedly put in place a hiring freeze for flight attendants in April amid uncertainty in the travel market. The financial services company T Rowe Price slowed down its hiring. And amid a slowdown in research grants, universities have put in place hiring freezes, most recently Johns Hopkins University, which currently has 600 National Institutes of Health-funded medical research projects under way.

As Al Jazeera has previously reported, small businesses said because of the looming tariffs, they’ve had to implement hiring freezes.

Hiring for small businesses declined in May by 4.4 percent compared with this time last year, according to Homebase, a payroll service provider for more than 150,000 small businesses accounting for roughly 3.8 million workers.

To forecast what to expect in the jobs market moving forward, EPI’s Gould suggests a close watch on key indicators including housing starts and factory orders, which indicate that manufacturers and construction companies will need to cut jobs if trends continue.

“Some of the government data [like the jobs and JOLTS report] takes a lot longer to sort of see trouble to catch that turning point and you might see it in the other measures a little bit faster, but there’s also a lot of volatility in them,” Gould said.

Advertisement

In April, residential home construction declined by 0.9 percent, the third straight month of declines, suggesting a pullback that indicates both builders and consumers are wary about building new homes and making improvements. At the same time, orders for goods made in US factories fell by 3.7 percent in April, according to the Census Bureau.