The U.S. Bureau of Labor Statistics and Department of Labor released new data this week showing the labor market remains steady but is showing signs of strain.

Employers added 139,000 jobs in May, keeping the unemployment rate at 4.2 percent for the third straight month. This figure matches forecasts and suggests that, on the surface, the job market remains resilient.

However, a closer look reveals growing friction for job seekers and a rise in unemployment claims. Initial jobless claims, which count people filing for unemployment benefits for the first time, held at 248,000 for the week ending May 31.

This is the highest level since October 2024 and above what economists expected. The four-week moving average, which smooths out weekly swings, rose to 240,250.

Continuing jobless claims, which count those still receiving benefits after their first week, climbed by 54,000 to 1.956 million, the highest since the end of 2021.

Jobs Hold Steady in the U.S. but Friction Grows as Unemployment Claims Rise. (Photo Internet reproduction)

These numbers show that while people are not losing jobs at a rapid pace, it is taking longer for the unemployed to find new work. The insured unemployment rate, which measures the share of the workforce receiving benefits, edged up to 1.3 percent.

US Labor Market Shows Signs of Strain as Participation Slips

The number of people jobless for less than five weeks increased by 264,000 in May, while the number of long-term unemployed fell by 218,000. However, many economists warn this drop may reflect people leaving the labor force altogether, not finding new jobs.

The labor force participation rate, which measures the share of adults working or looking for work, slipped to 62.4 percent. The number of people outside the labor force surged by 622,000 in May.

This suggests that some Americans are giving up on job searches, possibly discouraged by fewer openings or more competition. The U-6 unemployment rate, which includes those working part-time for economic reasons and discouraged workers, offers a broader view of labor market challenges.