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The US labor market delivered stronger-than-expected results in May, adding 172,000 jobs while the unemployment rate held steady at 4.3%. Economists had forecast roughly half that number.
Revised figures for March and April added another 93,000 jobs to earlier estimates, bringing average monthly gains to 188,000 over the past three months. Private employers accounted for 122,000 of May's new positions, with hiring spread across most industries except information and natural resources. Local governments, restaurants, bars, and healthcare providers were among the strongest contributors.
Dr. Nela Richardson of ADP noted that "hiring was more broad-based in May than we've seen in the last few years," pointing to sustained momentum heading into the summer season. Heather Long of Navy Federal Credit Union added that "the hiring recession is over. American firms are hiring again."
Wage growth remained modest, rising 0.3% from April and 3.4% year-over-year, a pace consistent with the Federal Reserve's inflation target. Still, economists warn that real wages may be lagging behind price increases, leaving many workers struggling to keep up with obligations.
The report was the first under new Federal Reserve Chair Kevin Warsh, appointed by President Trump in January. While the Fed is expected to hold rates steady at its June meeting, administration officials have signaled they want Warsh to consider cuts to support growth. Treasury Secretary Scott Bessent remarked, "We've got a Warsh Fed now... I believe that he will do the right thing to balance inflation and growth."
Despite the upbeat hiring numbers, challenges remain. Many young people are finding it difficult to break into the labor market, and nearly 28% of the unemployed have been jobless for more than six months. Analysts also point to structural shifts, including the rise of remote work and gradual adoption of artificial intelligence, as factors reshaping opportunities.
Overall, May's report suggests the US labor market has regained stability after a weak 2025.
