Some industries hired, others cut jobs: we zoom out with charts by major industry categories.

By Wolf Richter for WOLF STREET.

Job growth at nonfarm employers was substantial for the third month in a row, and beyond the month-to-month squiggles, the three-month average job growth, which had bottomed out late last year and has been zigzagging higher since then, jumped in May to the highest level since March 2024, decidedly breaking the years-long long downward trend.

Total payrolls at all nonfarm employers rose by 172,000 in May from April, and the prior two months were revised higher by a combined 93,000, according to the Bureau of Labor Statistics today (blue columns in the chart). The three-month average job gain rose to 188,000 in May, the highest since March 2024 (red line).

Major industries are depicted in the charts further down. Just briefly, employment at the federal government, after having plunged by 333,000 workers or by over 11% since January 2025, remained roughly unchanged in May. State governments continued to shed jobs, and since January 2025 have shed 58,000 jobs; a big part of state government employment is at universities and colleges, and they’re struggling. Local governments (mostly educators, first responders, and healthcare workers) continued to add jobs.

Immigration crackdown caps the labor force.

These job gains of the past three months would be nothing to write home about, under normal conditions. But the current conditions are not “normal” for the US: as a result of the crackdown on illegal immigration and the tightening up of legal work-visa immigration, the labor force has shrunk after ballooning in 2021 through 2024, and there are fewer workers in the labor market than there were in 2024.

The labor force is the supply of labor, composed of people who are working or actively looking for work. So supply of labor has been constrained, while demand for labor is growing at a moderate pace, which is keeping the unemployment rate very low.

The labor force data is based on household surveys that are adjusted annually at the beginning of the year to the Census Bureau’s revisions of the US population (the last two annual adjustments are the blue and green segments in the chart).

The unemployment rate inched down a hair to 4.30% in May from 4.34% in April, and has been roughly stable at this low rate for the third month in a row, and is unchanged from a year ago.

The unemployment rate reflects the number of unemployed people who are actively looking for a job (7.31 million) divided by the labor force (170.08 million).

Zooming out, this is a relatively tight labor market within the 50-year timeframe, largely because of the tight supply of labor, amid moderate job growth.

The prime-age labor force participation rate rose to 83.9% in May. The three-month average remained at 83.8%. This range has been the highest since the Dotcom Bubble in the 1990s.

This high prime-age participation rate is the result of more people getting pulled into the labor force by demand for labor amid tight supply of labor due to the crackdown on immigration and boomer retirements.

The prime-age labor force consists of people between 25 and 54 years old. It eliminates the issue of the retiring boomers. When people retire and stop looking for a job, they’re no longer “participating” in the labor force but remain in the population until they die. It’s the surge of boomer retirements over the past 15 years that has pushed down the overall labor force participation rate.

Average hourly earnings rose by 0.32% in May from April (+3.9% annualized), and by 3.45% year-over-year.

Inflation has been accelerating for months and in April reached 3.8%. The CPI for May will be released next week. So inflation now exceeds wage growth.

Employment by major industry.

The charts below zoom out and take the long view beyond the month-to-month squiggles. Employment by industry is shown in millions of employees.

The jobs in each industry are defined by work location. The surveys are sent to employer facilities. The primary activity at that facility determines the industry category (NAICS code). For example, a worker at an Amazon fulfillment center would be under “transportation and warehousing,” not “retail.”

Some industry categories are very broad, and therefore have a very large number of employees, such as “Professional and business services,” which is where many tech and AI offices are categorized, but also includes architects, lawyers, accountants, etc. Others are narrower and therefore have far fewer employees, such as “Manufacturing,” which includes only employees at manufacturing plants, but not employees at other offices, design centers, or service centers of manufacturing companies. For example, Tesla has many employees in the US that are not classified under “manufacturing” because they work in facilities where no manufacturing takes place.

Federal government: Since January 2025, civilian employment shrank by 333,000 workers.

• Total employment: 2.68 million
• 3-month average growth: -4,000

Government payrolls don’t include workers on the payroll of government contractors; they’re in private-sector categories, such as in “Professional and business services,” and government cutbacks on contractors triggered some layoffs on those non-government categories also.

Jobs in Healthcare and social assistance:

• Total employment: 23.86 million
• 3-month average growth: +66,000

Jobs in Professional and business services: includes facilities whose employees work primarily in Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support, and Waste Management and Remediation Services.

It includes jobs in tech and social media, which had gone on a bout of massive over-hiring during the pandemic and then shed the excess.

• Total employment: 22.47 million
• 3-month average growth: +19,000

Jobs in Construction (all types, from single-family housing to highways):

• Total employment: 8.38 million
• 3-month average growth: +14,000

Jobs in Manufacturing: Automation powers manufacturing in the US. All new plants in the US are heavily automated, and automation at old plants is constantly improved, to reduce to costs of manual labor. Jobs at manufacturing plants today require a high skill level and include tech jobs.

• Total employment: 12.61 million
• 3-month average growth: +7,000

Jobs in Leisure and hospitality – restaurants, hotels, resorts, casinos (other than Wall Street), etc.:

• Total employment: 17.08 million, new record.
• 3-month average growth: +48,000

Jobs in Retail trade are at brick-and-mortar retail stores, such as malls, auto dealers, grocery stores, gas stations, etc., and other retail locations such as markets. It does not include the tech-related jobs of ecommerce operations, drivers, and warehouse employees.

A big portion of this sector has been under pressure from ecommerce, and dozens of major retailers have been liquidated in bankruptcy court, some of which we have documented since 2016 in our Brick-and-Mortar Meltdown series.

Brick-and-mortar retailers that are doing well are those that are selling groceries, motor vehicles, gasoline, and others that are not under pressure from ecommerce.

• Total employment: 15.46 million
• 3-month average growth: +11,000.

Jobs in Financial activities (finance and insurance plus real estate renting, leasing, buying, selling, and management).

• Total employment: 9.10 million
• 3-month average growth: -15,000

Jobs in Transportation and Warehousing:

• Total employment: 6.05 million
• 3-month average growth: +22,000

Jobs in Wholesale Trade:

• Total employment: 6.18 million.
• 3-month average growth: -2,000

Jobs in “Other services”: includes equipment and machinery repairing, promoting or administering religious activities, grantmaking, advocacy, dry-cleaning, laundry services, personal care services, death care services, pet care services, photofinishing services, temporary parking services, and dating services.

• Total employment: 6.03 million
• 3-month average growth: -1,000

Jobs in “Information” includes facilities where people primarily work on motion picture and sound recording, broadcasting including over the Internet, telecommunications, web search portals, data processing, data transmission, information services, and software publishing.

There may also have been shifts in workers between work sites classified under “Information” to work sites classified under “Professional and business services” as many companies have offices in both segments. Information is a small category compared to Professional and business services.

• Total employment: 2.78 million
• 3-month average growth: -3,000

Jobs in Arts, Entertainment, and Recreation:

• Total employment: 2.70 million
• 3-month average growth: +5,000

Jobs in Utilities:

• Total employment: 0.61 million
• 3-month average growth: +1,000

Jobs at State governments, a large portion of which are jobs a state universities and colleges, which are huge employers, but enrollment especially of foreign students, where universities get a big chunk of their tuition and fee income, has declined, and staffing has responded.

Since January 2025, state governments had shed 58,000 jobs.

• Total employment: 5.47 million
• 3-month average growth: -2,000

Jobs at Local governments, mostly educators, first responders, and healthcare workers.

• Total employment: 15.24 million
• 3-month average growth: +28,000

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