June 16, 2025

May 2025 Labor Market Snapshot: Steady Growth, Slower Momentum

Job growth held steady in May, but signs of a slowdown are emerging. Here’s what it means for payroll, risk, and the workers’ comp landscape.

Tyler Bugeaud

Duey, Co-founder

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May 2025 Labor Market Snapshot: Steady Growth, Slower Momentum

What the latest job numbers mean for employers, workers, and the workers’ comp industry.

The labor market continued to grow in May but the pace is slowing slightly. According to the latest analysis from the National Council on Compensation Insurance (NCCI), the U.S. economy added 139,000 jobs last month, with nearly all of that growth coming from the private sector.

This kind of job growth is still solid. It’s enough to keep the unemployment rate steady. But recent revisions to previous months show a cooling trend that employers and workers should pay attention to.

📊 Job Gains Were Strong But Past Months Were Revised Down

While May’s job growth was healthy, March and April were both revised downward. That means job growth so far in 2025 is slower than it first appeared.

Still, growth remains close to the level needed to avoid a rise in unemployment which is good news overall.

Bottom line: We’re not in decline, but we’re moving at a slower pace than earlier reports suggested.

🏥 Health Care and Hospitality Lead the Way

Job growth in May was mostly concentrated in:

Health care
Leisure and hospitality

Most other industries saw little to no change.

Manufacturing, in particular, lost about 8,000 jobs, possibly an early sign of pressure from changing trade policy or global market shifts.

For workers’ comp professionals, this matters because these sectors have very different risk profiles and payroll structures. Growth in health care and hospitality may lead to shifts in claim types and frequency.

💵 Wages and Hours Are Holding Steady

Even though hiring is slowing down, wage growth remains steady across most industries. More importantly, wage gains have been broad, affecting more industries than job growth alone.

✔️ Workers who already have jobs are seeing better pay

✔️ Payrolls are growing, even if headcount isn’t growing quickly

This is a positive sign for workers’ comp premium growth, which is closely tied to total payroll.

📈 The Big Picture: Stable, but Slower

According to NCCI’s May 2025 Labor Market Insights, the labor market remains stable overall. There’s no sign of major deterioration, but the surge in job-switching and fast-paced hiring we saw after the pandemic has slowed down.

If you’re already employed, you may be seeing strong wage growth. But if you’re job hunting, this environment can feel tougher, less turnover, more competition, and longer hiring timelines.

⚠️ What It Means for Workers’ Comp and Employers

Payrolls are still growing, driven more by wages than by headcount
Sector shifts matter: growth in high-risk sectors like health care and hospitality could affect claim patterns
A slower labor market means it’s a good time to focus on retention, return-to-work programs, and workplace safety

📌 Source:
Data and insights are based on NCCI’s Labor Market Insights – May 2025 report. Read the full report at ncci.com.