The U.S. economy added 172,000 jobs in May, a solid gain that topped expectations and kept the unemployment rate unchanged at 4.3%. The Bureau of Labor Statistics released the jobs data Friday morning, giving investors a fresh read on a labor market that remains resilient even as parts of the economy cool.
The report landed at 8:30 a.m. ET and quickly reset the debate over how much slack is showing up in hiring. Economists had been looking for an uptick in payrolls and a steady unemployment rate, but the 172,000-job increase was well above the 88,000 expected and followed 115,000 jobs added last month.
The May gain was the third straight month of positive movement in nonfarm payrolls, extending a run that included revised increases of 179,000 in April and 214,000 in March. Leisure and hospitality led the way with 70,000 jobs added, local government added 55,000 and health care added 35,000, helping offset weakness elsewhere in the economy.
One soft spot stood out. The financial activities sector lost 22,000 jobs in May, a reminder that the hiring picture is still uneven even in a report that otherwise beat the market’s bar. ADP had already pointed to strength in private payrolls, saying employers added 122,000 roles in May and that eight out of the 10 super-sectors it tracks posted hiring.
That mix mattered because traders were already on edge before the release. US stock futures mostly fell early Friday, with the S&P 500 slipping 0.4% and the Nasdaq 100 sinking 1%, while Dow futures nudged higher. Investors have been watching the jobs report for clues about the economy amid signs of rising inflation, and the S&P 500 was trying to lock in a 10th straight week of gains, a streak that would have been its longest since 1985.
The next question is how the stronger-than-expected labor market reading will shape the Federal Reserve’s view of inflation and interest rates. For now, the message from the May jobs report is straightforward: hiring is still holding up, and Wall Street will spend the rest of Friday deciding whether that is a warning sign or a cushion.
