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The U.S. economy added 172,000 jobs in May, far exceeding economists’ expectations and signaling continued strength in the labor market despite rising inflation and broader economic uncertainty.
Economists surveyed by FactSet had forecast payroll growth of about 105,000 jobs for the month.
The Labor Department also revised hiring figures upward for the previous two months, reporting gains of 214,000 jobs in March and 179,000 jobs in April. Together, the revisions underscore a labor market that has remained resilient even as inflation accelerates and concerns about economic growth persist.
The unemployment rate held steady at 4.3% in May, unchanged from the previous month.
Much of the job growth came from the leisure and hospitality sector, which added 70,000 positions. Local government employment increased by 55,000 jobs, while the health care industry contributed another 35,000 jobs.
The latest report marks the third consecutive month of strong hiring. From March through May, employers added an average of nearly 190,000 jobs per month, a sharp turnaround from the modest job losses recorded during the winter months.
The solid labor market performance comes as inflation continues to rise, fueled in part by higher energy costs linked to the ongoing conflict in the Middle East. Economists say the combination of strong hiring and elevated inflation may give Federal Reserve policymakers little reason to consider lowering interest rates in the near future.
Despite robust hiring, wage growth remains a concern for many workers. Average hourly earnings increased 3.4% over the past year, below April’s 3.8% inflation rate, meaning many Americans are still seeing their purchasing power eroded by rising prices.
The report suggests employers remain willing to hire even as economic headwinds persist, though the gap between wage growth and inflation continues to weigh on household finances.
