Topline
The U.S. economy added far more jobs than expected in May, even as the share of Americans working or looking for work remained unchanged, according to federal data published Friday, while recent reports indicated a stable job market despite a steady decline in total employment.
Recent data pointed to a stable job market, even as total employment declined.
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Key Facts
The U.S. added 172,000 nonfarm jobs in May and the unemployment rate remained 4.3%, the Bureau of Labor Statistics reported, far surpassing consensus analyst estimates of 105,000 new jobs, according to FactSet.
Total employment growth for March was revised up by 29,000, rising to 214,000, and April was revised up by 64,000 to 179,000, nearly triple projections for an added 65,000 jobs in the month.
The labor participation rate, or the percentage of Americans working or looking for work, settled at 61.8%, matching projections and the lowest rate since December 2021.
Total employment rose slightly to 162.7 million in May, a nearly 0.3% decrease from May 2025, following a decline in four straight months in the longest such streak since 2009.
Leisure and hospitality headlined job growth across all industries, adding 70,000, while local government added 55,000, health care added 35,000 and social assistance added 12,000.
ai is the most cited reason for layoffs this year
Employers in the U.S. cut just over 97,000 jobs in May, career services firm Challenger, Gray & Christmas reported Thursday. The tech sector had some 38,000 layoffs, the most in a single month for the sector since August 2024, as the Challenger report found AI is now the leading reason cited for job cuts. The technology sector is now responsible for nearly 88,000 job cuts this year, ranking ahead of market and economic conditions, closures and restructuring.
the private sector reported job growth, too
Private payrolls increased by 122,000 in May, the most since January 2025, according to the payroll processing firm ADP. Nela Richardson, the firm’s chief economist, said hiring was more “broad-based in May than we’ve seen in the last few years,” noting the labor market “continues to show sustained momentum going into the summer hiring season.” Eight of the 10 sectors tracked by ADP added jobs in the month, including education and health services, which added 57,000 jobs, the most among all sectors.
what to watch for
A better-than-expected jobs report for May should all but guarantee the Federal Reserve holds off on lowering interest rates. The central bank is now favored to raise interest rates by its December meeting, with odds of a hike rising to 68.5% as of Friday, according to CME Group’s FedWatch tool.