United States: The labor market continues to adjust moderately.
2025-06-10
■ The U.S. labor market continues to show mild adjustments, and the balance between labor supply and demand tends to stabilize.
■ Signs of accelerated labor market adjustments are evident from some indicators, such as the number of unemployment benefit applications.
The U.S. employment data for May, released on the 6th, indicated that non-agricultural employment increased by 139,000 from the previous month. However, this growth slowed once more after two months. The figures for March and April were revised downward, revealing a cumulative decrease of 95,000. This suggests that the recent momentum of employment growth is weaker than previously confirmed, though it remains slightly below the average increase over the past 12 months (which was an increase of 149,000 from the previous month). The unemployment rate stood at 4.2%, and the average weekly working hours remained at 34.3 hours, both unchanged since April. Meanwhile, the average hourly wage increased by 0.4% from the previous month, rising faster than inflation. Although the labor market is still adjusting, the overall situation surrounding the announcement of the "mutual tariffs" has not significantly changed, maintaining overall stability. Non-agricultural employment experienced declines in the manufacturing and government sectors, while the service industry displayed consistent growth momentum for the third consecutive month. In the service sector, the education, health care, and leisure and hospitality industries added a total of 135,000 jobs from the previous month, with recent employment growth concentrated in these sectors. Specifically, employment trends in the leisure and hospitality industry closely correlate with economic performance, which will significantly impact future employment trends.
The U.S. Job Openings and Labor Turnover Survey (JOLTS) for April, released on the 3rd, indicated that the number of job vacancies (7.391 million) rose once again after two months. Yet, due to an overall downward trend, the number of job vacancies per unemployed person (1.03/person) approached 1.0/person, signaling a move towards balance in the labor supply and demand relationship across the economy. Furthermore, the fundamental trends concerning the number of layoffs (1.786 million) and voluntary resignations (3.194 million) have not experienced significant changes. As of April, there have been no substantial shifts in corporate layoffs or workers' job-hunting activities. However, initial unemployment benefit claims in May showed an upward trend, with claims in the week ending May 31 reaching 247,000 (with a four-week average of 235,000), marking the highest level since October of last year. Concurrently, the number of continuing unemployment claims (1.904 million in the week ending May 24, with a four-week average of 1.895 million) reached its highest four-week average since December 2021.
Influenced by the high tariff policy of the United States and the increasingly volatile policy directives from the U.S. government, companies face challenges in formulating medium- and long-term business plans. Even if the current tariff increases are temporarily alleviated, companies tend to be cautious regarding labor input (hiring) and capital investment (equipment investment) for business expansion and capacity enhancement. This prolonged trade negotiation could lead to adjustments in the labor market. As the excess demand for labor has largely diminished, corporate hesitancy to recruit may raise the unemployment rate and extend its duration. Should further signs of accelerated adjustment be confirmed, the need to slow down financial tightening will likely increase accordingly.
■ Signs of accelerated labor market adjustments are evident from some indicators, such as the number of unemployment benefit applications.
The U.S. employment data for May, released on the 6th, indicated that non-agricultural employment increased by 139,000 from the previous month. However, this growth slowed once more after two months. The figures for March and April were revised downward, revealing a cumulative decrease of 95,000. This suggests that the recent momentum of employment growth is weaker than previously confirmed, though it remains slightly below the average increase over the past 12 months (which was an increase of 149,000 from the previous month). The unemployment rate stood at 4.2%, and the average weekly working hours remained at 34.3 hours, both unchanged since April. Meanwhile, the average hourly wage increased by 0.4% from the previous month, rising faster than inflation. Although the labor market is still adjusting, the overall situation surrounding the announcement of the "mutual tariffs" has not significantly changed, maintaining overall stability. Non-agricultural employment experienced declines in the manufacturing and government sectors, while the service industry displayed consistent growth momentum for the third consecutive month. In the service sector, the education, health care, and leisure and hospitality industries added a total of 135,000 jobs from the previous month, with recent employment growth concentrated in these sectors. Specifically, employment trends in the leisure and hospitality industry closely correlate with economic performance, which will significantly impact future employment trends.
The U.S. Job Openings and Labor Turnover Survey (JOLTS) for April, released on the 3rd, indicated that the number of job vacancies (7.391 million) rose once again after two months. Yet, due to an overall downward trend, the number of job vacancies per unemployed person (1.03/person) approached 1.0/person, signaling a move towards balance in the labor supply and demand relationship across the economy. Furthermore, the fundamental trends concerning the number of layoffs (1.786 million) and voluntary resignations (3.194 million) have not experienced significant changes. As of April, there have been no substantial shifts in corporate layoffs or workers' job-hunting activities. However, initial unemployment benefit claims in May showed an upward trend, with claims in the week ending May 31 reaching 247,000 (with a four-week average of 235,000), marking the highest level since October of last year. Concurrently, the number of continuing unemployment claims (1.904 million in the week ending May 24, with a four-week average of 1.895 million) reached its highest four-week average since December 2021.
Influenced by the high tariff policy of the United States and the increasingly volatile policy directives from the U.S. government, companies face challenges in formulating medium- and long-term business plans. Even if the current tariff increases are temporarily alleviated, companies tend to be cautious regarding labor input (hiring) and capital investment (equipment investment) for business expansion and capacity enhancement. This prolonged trade negotiation could lead to adjustments in the labor market. As the excess demand for labor has largely diminished, corporate hesitancy to recruit may raise the unemployment rate and extend its duration. Should further signs of accelerated adjustment be confirmed, the need to slow down financial tightening will likely increase accordingly.