May’s jobs report shows a labor market that’s still expanding, but with signs of strain beneath the surface. While job growth came in slightly above expectations, a sharp drop in labor force participation and downward revisions from previous months suggest a more cautious outlook for the months ahead.
For staffing and recruiting professionals, this month’s report reinforces the importance of being agile, proactive, and focused on sectors with long-term growth potential.
Here’s what stood out—and what it means for your business.
Total jobs added: 139,000
Unemployment rate: 4.2% (unchanged from April)
Labor force participation: Fell to 62.4%—the lowest rate since December 2024
Average hourly earnings: +0.4% month over month; +3.9% year over year
Revisions: March and April job gains were revised down by a combined 95,000
May 2025 Jobs Report: By the Numbers
Healthcare Continues To Drive Demand
Healthcare added another 62,000 jobs in May, with strong gains in hospitals and ambulatory healthcare services. The sector continues to be one of the most consistent engines of job growth, alongside social assistance, which added 16,000 jobs.
What it means for recruiters Now’s the time to double down on healthcare talent. Demand remains steady, and specialized roles continue to be difficult to fill. Firms that can deliver credentialed, vetted candidates quickly will have a competitive advantage.
Hospitality Hiring Heats Up
Leisure and hospitality added 48,000 jobs in May, well above its 12-month average. Much of this growth came from restaurants and bars, which are staffing up for the summer travel season.
What it means for recruiters Expect a surge in seasonal and hourly hiring requests. Hospitality clients will be moving fast, so make sure your candidate database is active and engagement-ready.
Fewer People Are in the Workforce
The labor force shrank by 625,000 people in May, pushing the participation rate to a five-month low. While it’s too early to call this a trend, it’s a clear signal that recruiters may face growing challenges sourcing active candidates.
What it means for recruiters Start planning for tighter talent pipelines. If you haven’t already, ramp up passive sourcing strategies, re-engage former candidates, and leverage technology to uncover hidden talent.
Wage Growth Holds Steady
Wages rose 0.4% in May and are up 3.9% year over year. While inflation has cooled, candidate salary expectations remain elevated, especially in industries like healthcare, tech, and finance.
What it means for recruiters Talk compensation early and often. Use real-time labor market data to advise clients on competitive pay rates and win the candidates they want.
Declines in Government and Manufacturing
Federal government employment dropped by 22,000 jobs in May, continuing a steady decline since the start of the year. Manufacturing also shed 8,000 jobs—the sector’s first meaningful dip of 2025.
What it means for recruiters
Clients in these sectors may start to slow hiring. Consider reallocating resources to faster-growing industries, and offer support in transitioning displaced workers to adjacent roles.
What Staffing Firms Should Do Now
While job growth continues, it’s no longer evenly distributed across the labor market. In this environment, staffing firms that can adapt quickly and guide clients through complexity will lead the way.
Here are three actions to take:
Prioritize high-growth industries. Focus your sourcing and sales efforts on healthcare, hospitality, and other expanding sectors.
Refresh your talent pipelines. Use AI tools to identify qualified candidates and re-engage previous applicants.
Advise clients on labor market shifts. Be a consultative partner. Help clients navigate evolving wage expectations and workforce participation trends.
Bottom Line
The May jobs report shows a market that’s still growing, but with increasing signs of slowdown in certain areas. For staffing professionals, this is the moment to focus on resilience: strengthen your candidate networks, deepen your industry expertise, and keep clients informed.
With the right technology and strategy, you’ll be ready for whatever comes next.
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