The US economy added 172,000 jobs in May, blowing past expectations, according to the government’s closely watched jobs report. The unemployment rate remained flat at 4.3%.
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 updated to show 214,000, bringing the first monthly gain above 200,000 since early 2024.
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.
“It’s easier to get a job now, but it’s hard to find a job where your pay will keep up with current inflation,” Heather Long, chief economist at the Navy Federal Credit Union, posted on X.
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.”
As Yahoo Finance covers the rising cost of living coupled with a challenging job market, we’re looking to hear from real workers about what they earn — and whether it’s enough. Reach out to emma.ockerman@yahooinc.com to share your story.
Better news for job-seekers?
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.”