In a recent CNBC interview, Kelly cautioned that the positive headline jobs numbers are masking a deeper trend of economic deceleration that many are overlooking.
Although May’s payroll report showed a gain of 139,000 jobs and an unchanged unemployment rate of 4.2%, Kelly noted that revisions to prior months present a bleaker picture. The Labor Department reduced combined March and April job gains by 95,000, and the household survey revealed a massive decline of over 600,000 jobs last month.
“That survey is volatile, but still a warning sign,” Kelly said. “Through 2025, we’re averaging only 124,000 new jobs per month, compared to 168,000 in 2024. The slowdown is real — it’s just not obvious in the top-line figures.”
He added that misleading trade data and quirks in GDP calculation may be concealing broader economic strain.
Supporting this view, PNC Bank highlighted a worrying drop in labor force participation: about 625,000 workers exited the labor force in May, effectively offsetting job gains and signaling growing demotivation among job seekers (PNC Economics).
Latest U.S. jobs report shows 139K payrolls added in May, but household survey lost ~700K jobs — labor market cooling amid tariff uncertainty. pic.twitter.com/xyz123
— Reuters Business (@ReutersBiz) June 6, 2025
Indeed, official data from Reuters reports that nonfarm payrolls increased by 139,000 in May, but downward revisions left net growth for March-May at just 44,000 jobs. While the unemployment rate remained steady at 4.2%, labor force participation dipped to 62.4%, echoing concerns raised by Kelly.
Economists are now pointing to cooling signs: job openings rose in April but layoffs hit a nine-month high, per the JOLTS report. Meanwhile, the ADP survey recorded only 37,000 private-sector jobs in May—the smallest gain in over two years (Reuters / ADP).
What this means for policy: Despite these signs of stress, the Federal Reserve appears likely to hold interest rates steady at its June 17–18 meeting, citing cooling yet stable labor conditions (Reuters).
Bottom line: While job growth and unemployment rates may seem healthy, deeper metrics—like downward revisions, household survey losses, and declining labor participation—point to underlying strain. Buyers, business owners, and policymakers should watch these warning signs closely as trade tensions and structural shifts erode the workforce’s stability.