Catenaa, Friday, June 05, 2026- The US economy added 172,000 jobs in May, almost double market expectations, as the labor market remains unaffected by Iran war.
Economists surveyed by Bloomberg had anticipated payroll growth of 88,000 for the month.
April’s jobs report, which itself was a massive beat, was also revised to show an even better 179,000 jobs gained, compared to the 115,000 reported earlier.
March’s payroll growth was similarly revised to 214,000, marking the first monthly gain above 200,000 since early 2024. The unemployment rate remained flat at 4.3%.
Payroll gains were seen across several sectors, notably not relying just on the healthcare industry, which has been the primary engine of job growth as of late.
Leisure and hospitality added 70,000 jobs last month, while local governments grew payrolls by 55,000. Healthcare added about 35,000 positions.
The question will be how well-paying those roles are as higher prices sink their teeth into workers’ wallets. Average hourly earnings growth from last year, at 3.4%, is tracking lower than the pace of rising costs.
Food services and drinking places, for example, added 48,000 jobs in May, and average hourly earnings for that industry are $21.86, according to government data.
That tracks with a Bank of America Institute analysis this week that showed payroll growth accelerated in May, though it “appears much of this strength is being driven by gains in lower-income jobs.”
Data on private payroll growth from ADP already showed some strength for May: Private employers added 122,000 jobs for the month, with hiring taking place across eight of the 10 supersectors ADP tracks. A month earlier, job openings soared to 7.62 million, a sharp increase from March.
Still, hiring declined in April, federal government data showed, and the increase in openings was concentrated in the professional and business services sector.
The Federal Reserve’s Beige Book for May, released Wednesday, also noted that “employment showed little to no change” in 11 of the Fed’s 12 districts.
“Most Districts described a low-hire, low-fire environment, with workers increasingly reluctant to change jobs because of economic uncertainty,” the report noted. “Hiring remained selective and primarily focused on critical roles or attrition replacement.”
