Key Takeaways

The Bureau of Labor Statistics is scheduled to release its monthly jobs report on Friday morning, and investors will watch closely.

The May employment report is the government's official measure of the labor market. If other measures from the private sector are any indication, Friday's report could be a harbinger of tariffs' effects on the broader economy.

Here's what to know about the report ahead of its release.

What To Expect From the Jobs Report

According to a survey by Dow Jones Newswires and The Wall Street Journal, economists expect the report to show 125,000 jobs were added in May. That would be a slowdown from the unexpectedly high 177,000 in April.

"While trade policy uncertainty declined after the U.S.-China trade deal , it remained very high across the payroll month," wrote analysts at Goldman Sachs on Thursday. "Elevated uncertainty is likely to disproportionately weigh on employment growth in months when gross hiring is particularly elevated, such as May."

Economists also expect the unemployment rate to remain at 4.2%, the same as last month. Over the last twenty years, it has averaged 5.8%.

How Has the Labor Market Been Holding Up?

Official government reports on the labor market have shown it has been surprisingly resilient to tariff pressures. Still, economists and private sector reports indicate a rough road ahead.

Economists predict that higher tariffs will cause companies to pull back on their highest cost—labor. That could mean fewer new jobs or layoffs.

Uncertainty around tariff policies has already caused businesses to hold off on investments like hiring, according to anecdotal reports . But so far, that hasn't shown up in official government data. This week, the Job Openings and Labor Turnover report found that employers had 7.4 million jobs open in April, up from 7.2 million in March. That was more than economists expected, though they warned that it is a lagging indicator.

Other, more-recent measures of the labor market show a grimmer picture. A report from payroll provider ADP found that private employers added the fewest jobs since March 2023, almost half compared to the month prior. Economists tend to shrug off that report, as it only measures a portion of the labor market.