US economy adds 172,000 jobs in May, sharply beating expectations

The US economy added 172,000 jobs in May, sharply exceeding market expectations, while the unemployment rate remained unchanged, the Bureau of Labor Statistics said Friday.

Total nonfarm payroll employment rose by 172,000 last month, compared with expectations of 85,000. The figure was broadly similar to April's revised increase of 179,000.

The unemployment rate held steady at 4.3% in May and has remained in a narrow range of 4.3% to 4.5% since July 2025, according to the bureau.

The number of unemployed people changed little at 7.3 million, while the labor force participation rate was unchanged at 61.8%. The employment-population ratio also showed little movement at 59.2%.

Job gains were led by leisure and hospitality, local government, and healthcare, while employment in financial activities declined.

Leisure and hospitality added 70,000 jobs in May, well above its average monthly gain of 14,000 over the previous 12 months. Food services and drinking places accounted for 48,000 of the increase.

Employment in local government rose by 55,000, largely reflecting a 44,000 gain in local government excluding education.

Healthcare added 35,000 jobs, broadly in line with its average monthly gain of 38,000 over the previous year. Ambulatory healthcare services added 26,000 jobs, including 11,000 in home healthcare services, while hospital employment continued to trend upward with a 6,000 increase.

Social assistance employment also continued to trend higher, adding 12,000 jobs in May, mostly in individual and family services.

By contrast, financial activities employment fell by 22,000 and is down by 107,000 from a recent peak in May 2025. Losses were recorded in insurance carriers and related activities, which shed 11,000 jobs, and commercial banking, which lost 3,000 jobs.

Transportation and warehousing employment was little changed, rising by 1,000, but remained 92,000 below its February 2025 peak. Air transportation lost 9,000 jobs, largely due to a business closure.

Average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3%, to $37.53 in May. On an annual basis, average hourly earnings increased by 3.4%.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours.

The bureau also revised upward job gains for the previous two months. March payrolls were revised higher by 29,000, from 185,000 to 214,000, while April's gain was revised up by 64,000, from 115,000 to 179,000.

With the revisions, employment gains in March and April combined were 93,000 higher than previously reported.