The U.S. labor market showed surprising resilience in May, as job creation outpaced forecasts and wage growth accelerated, defying concerns that mounting tariffs and trade friction would drag down economic momentum.

Nonfarm payrolls rose by 139,000 in May, beating consensus expectations of 130,000, according to data released Friday by the Bureau of Labor Statistics.

While the figure is slightly below April's revised 147,000, it marks a solid gain that reassured markets about the labor market's underlying strength.

Private sector hiring came in at 140,000, also ahead of the 120,000 expected, underscoring strong demand in services and other non-government industries. Yet, government employment also dipped, with payrolls shrinking by 1,000.

Average hourly earnings rose 0.4% in May, the strongest monthly increase since January and ahead of the expected 0.3%.

On a year-over-year basis, wages climbed 3.9%, unchanged from April but well above the forecast of 3.7%.

Market Reaction

U.S. equity markets positively responded to the stronger-than-expected report. Futures on the S&P 500 were 0.9% higher by 8:35 a.m. ET on Friday. On Thursday, the SPDR S&P 500 ETF Trust ( SPY ) fell by 0.5%.

The U.S. dollar index – as tracked by the Invesco DB USD Index Bullish Fund ETF – rose by 0.3%.

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Image created using artificial intelligence via Midjourney.