A massive 696,000 Americans lost jobs in May, marking the second-largest decline since 2020. Household survey shows deeper employment struggles.

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The latest employment data reveals a troubling trend in the U.S. job market. The household survey shows that 696,000 Americans lost jobs in May, marking the second-largest decline since the 2020 crisis. This sharp drop raises concerns about the stability of employment, despite official reports showing modest job growth.

The unemployment rate remained at 4.2%, but the household survey paints a different picture. Unlike payroll data, which counts total jobs, the household survey measures individual employment status, meaning one person with two jobs is counted as a single employed individual. This distinction highlights the deeper struggles within the labor force.

Labor force participation declined to 62.4%, reflecting a 625,000 drop in workforce engagement. The employment-population ratio also fell to 59.7%, its lowest level since the pandemic. These figures indicate that fewer working-age Americans are actively employed, despite reports of job creation.

Federal government layoffs contributed to the downturn. The sector lost 22,000 jobs in May, adding to a total of 59,000 cuts since January. The Trump administration’s efficiency initiatives have driven reductions in federal employment, further impacting overall job numbers.

Wages increased 0.3% month-over-month, with a 3.9% annual gain, outpacing inflation. While this provides some relief for workers, the broader employment decline suggests that wage growth alone may not be enough to offset economic uncertainty.

Sources:

https://www.bls.gov/news.release/archives/empsit_06062025.htm

https://www.thehrdigest.com/jobs-report-shows-a-mixed-picture-of-resilience-and-growth/

https://www.usatoday.com/story/money/2025/06/06/may-jobs-report-data/84058995007/