The economy added 172,000 jobs in May as unemployment held steady

May's total came in just below April's upwardly revised count of 179,000. The result cleared two separate pre-release forecasts by a wide margin — Reuters reported that surveyed economists had penciled in 85,000, while the Dow Jones consensus tracked by CNBC had put the bar at 80,000.

Among sectors, leisure and hospitality posted the largest gain, with 70,000 new positions — a figure that dwarfed the 14,000 monthly average recorded over the preceding year. Within that category, food services and drinking places alone accounted for 48,000 hires. At the state and local level, municipalities outside of education drove a 55,000-job jump in local government payrolls. Health care rounded out the top contributors, adding 35,000 workers, a pace consistent with its recent monthly average near 38,000.

Financial activities was the one notable weak spot, shedding 22,000 jobs in May and bringing total losses in that sector to 107,000 since a peak in May 2025. Job losses occurred in insurance carriers and commercial banking.

Workers' paychecks ticked upward in May, with the average hourly wage climbing 12 cents to $37.53, a monthly increase of 0.3%. On a twelve-month basis, wage growth has decelerated to 3.4% — a rate not seen since August 2021, The New York Times noted.

Prior-month counts were also nudged higher: March's total climbed by 29,000 to reach 214,000, while April's figure was lifted by 64,000 to 179,000. Taken together, the two adjustments mean 93,000 more jobs on the books than earlier tallies had shown.

The number of unemployed people held at 7.3 million. Long-term unemployment — those jobless for 27 weeks or more — was little changed at 2.0 million but has risen by 524,000 over the past year. The labor force participation rate remained at 61.8%.

For Fed watchers, a beat of this magnitude gives policymakers little reason to revisit rate cuts. Since trimming its benchmark rate by three-quarters of a point late in 2025, the central bank has left borrowing costs parked in the 3.50%–3.75% corridor.

The next Employment Situation report, covering June, is scheduled for release on July 2, 2026.