US Job Growth Beats Expectations in May

A report released by the U.S. Labor Department on Friday shows that job growth in May slightly outpaced predictions. Non-farm payrolls rose by 139,000 jobs, following a downwardly revised gain of 147,000 jobs in April.

Economists had forecast an increase of roughly 130,000 jobs, which contrasts with the originally reported addition of 177,000 jobs in the previous month.

The stronger-than-expected gain was largely driven by the healthcare and social assistance sectors, along with leisure and hospitality, which contributed 78,300 and 48,000 new jobs respectively.

Meanwhile, federal government employment continued its downward trend, falling by 22,000 jobs in May.

The report noted that the unemployment rate held steady at 4.2 percent in May, consistent with economist estimates. A decline of 696,000 jobs—measured by the household survey—was nearly offset by a 625,000 reduction in the labor force.

Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association, stated, "These figures align with market expectations and will likely keep the Federal Reserve on hold for the next meeting or two. Should the labor market weaken further this summer, as predicted by MBA, we might see two cuts to the federal funds rate this year."

Additionally, average hourly earnings increased by 15 cents, or 0.4 percent, to $36.24 in May – a 3.9 percent increase compared to the same month last year.