The U.S. economy added 172,000 jobs in May, showing the labor market is gaining strength. This marks the third consecutive month of job growth. Earlier job gains for March and April were also revised higher.
Where the Jobs Are
Restaurants and bars led the way, adding 48,000 jobs as summer approached. Construction companies and local governments also saw hiring increases. Healthcare continued its steady growth, adding another 35,000 jobs.
However, the financial sector experienced job cuts, with banks and insurance companies reducing their workforce. Overall, the financial sector cut 22,000 jobs in May.
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Start Your News DetoxWages and Inflation
Hiring has picked up this spring, averaging 188,000 new jobs each month over the last three months. The workforce also grew slightly in May, with 83,000 more people working or looking for work. The unemployment rate remained at 4.3%.
Despite more hiring, employers are not offering large wage increases. Average wages in May were up 3.4% from a year ago. This increase is likely not keeping pace with inflation, as prices rose 3.8% in the 12 months ending in April.
Prices have been rising quickly since the U.S. war with Iran began three months ago. With the job market stabilizing, the Federal Reserve, led by new chair Kevin Warsh, will likely focus on controlling inflation. This means the central bank is unlikely to cut interest rates soon, despite pressure from President Trump. The Labor Department will release May inflation data next week, which will be important for the Fed's policy meeting in mid-June.
Deep Dive & References
Employment Situation Summary - Bureau of Labor Statistics, 2026
