America’s labor market delivered another surprise in May as employers added far more jobs than expected, giving the Federal Reserve another reason to hold off on cutting interest rates.
US employers added 172,000 jobs last month while the unemployment rate held steady at 4.3%, according to Labor Department data released Friday.
The payroll gain easily topped economists’ expectations for roughly 80,000 new jobs and came after the government revised March and April hiring figures higher by a combined 93,000 jobs.
The stronger-than-expected report suggests the labor market remains remarkably resilient despite concerns about slowing economic growth and uncertainty facing businesses.
Job gains were concentrated in leisure and hospitality, which added 70,000 positions in May. Local government added 55,000 jobs, while health care payrolls increased by 35,000.
Financial activities was one of the few weak spots, shedding 22,000 jobs during the month.
Average hourly earnings rose 0.3% in May and were up 3.4% from a year earlier, matching economists’ expectations.
The unemployment rate has now remained in a narrow range between 4.3% and 4.5% since July 2025, according to the Bureau of Labor Statistics.
The report is likely to reinforce the Federal Reserve’s wait-and-see approach on interest rates.
