The May jobs report landed Friday with an unmistakable signal: President Donald Trump’s economic playbook is beginning to reshape the post-Biden labor landscape. Employers added 139,000 jobs — beating expectations — while the unemployment rate held steady at 4.2 percent. But beneath the headline numbers is a deeper story of a transforming workforce and a reoriented global trade posture.
Private sector job creation beat forecasts, adding 140,000 positions — a sign that business confidence remains strong despite persistent global tensions and inflationary shadows. The services sector was the engine, accounting for 145,000 new jobs, while goods-producing industries, including manufacturing, saw a modest pullback of 5,000. Manufacturing specifically lost 8,000 jobs, but revisions to the prior month’s data softened the blow, turning an originally reported loss into a 5,000-job gain.
But one number stands out: federal employment fell by 22,000 in May, bringing the total drop to 59,000 since January. That’s no accident. It’s a direct outcome of President Trump’s pledge to shrink the size of government, and the data shows he’s making good on that promise.
This drawdown is more than a budgetary maneuver — it’s a philosophical shift. Trump’s vision of government is one that gets out of the way and lets private enterprise lead. And in May, at least on paper, that strategy paid dividends.
Not all signals were green. The labor force participation rate slipped slightly to 62.4%, continuing a trend that reflects demographic pressures, structural disengagement, or both. Yet average hourly earnings surged 0.4% in May — doubling April’s pace and beating expectations. Over the past year, wages are up 3.9%, outpacing inflation and delivering real gains to workers for the first time in years.
Then came the shocker. CNBC’s Rick Santelli could hardly contain himself Friday morning when live trade deficit data shattered expectations.
The April goods trade deficit came in at just $87.6 billion — a stunning improvement from the revised March figure of $140.5 billion. This represents the smallest trade deficit since September 2023, a dramatic swing that underscores how Trump’s tariff strategy is beginning to reshape global trade flows.
What changed? Trump’s April 2 announcement of reciprocal tariffs — followed by an April 9 freeze and selective hikes on Chinese imports — has clearly upended trade behavior. A diplomatic pause with the EU (set to expire July 9) and active negotiations with 17 U.S. trading partners, led by Treasury Secretary Scott Bessent, have placed America’s trading stance on a far more assertive footing.
The U.S. Court of International Trade attempted to block parts of Trump’s tariffs, but the Federal Circuit swiftly issued a stay. The Trump administration’s legal footing appears stable for now, giving it room to continue using tariff leverage as a blunt but effective trade tool. These measures are not merely protectionist gestures — they’re designed to reshape the manufacturing base, protect domestic industries, and force foreign powers to renegotiate decades-old trade deals.
