Labor Market and Economy Report: A Look at Trends in May 2025

By Eliza Hetrick

Executive Summary

Job Growth

The U.S. economy added 139,000 jobs in May. Notable gains occurred in healthcare (+62,200), leisure and hospitality (+48,000), and social assistance (+16,100), while notable declines occurred in the federal government (-22,000).

Unemployment and Labor Force Participation

The unemployment rate was unchanged at 4.2% in May for the third consecutive month. The labor force participation rate declined from 62.6% in April to 62.4% in May.

Unemployment rates specific to the industries Aston Carter supports were as follows for May: finance and insurance (2.7%), professional and business services (3.8%), hospitals (1.6%), utilities (1.5%), manufacturing (3.4%) and construction (4.8%).

Among skilled labor categories Aston Carter sources talent for, unemployment in business and financial was 2.4% and office and administrative was 3.6%.

Inflation

The year-over-year inflation rate increased by 2.4% between May 2024 and May 2025, slightly above April’s reading of 2.3%. As mentioned in last month’s report, the Federal Reserve has maintained interest rates at current levels so far this year, citing heightened economic uncertainty despite progress toward the 2.0% inflation target.

Wage Growth

Average hourly earnings increased by 3.9% for the 12 months ending May, relatively unchanged from the last three months. “Real” average hourly earnings (wages adjusted for inflation) increased by 1.4% between May 2024 and May 2025. In other words, average hourly earnings are keeping up with inflation, but consumers may still be feeling the pressure of higher prices.