America’s labor market delivered another pleasant surprise in May as employers added far more jobs than expected, though the strong numbers could give the Federal Reserve another reason to hold off on cutting interest rates.
US employers added 172,000 jobs last month while the unemployment rate held steady at 4.3%, according to Labor Department data released Friday.
Employment remains a bright spot in the economy — with an average of 188,000 jobs gained each of the past three months — after a disappointing 2025. Last year, employers largely held off on growing their workforces amid uncertainties about US tariff policy and cuts to the federal government, experts said.
“Consumers are still spending, businesses are still hiring, and the job market remains one of the strongest pillars holding up the economy,” Sung Won Sohn, professor of finance and economics at Loyola Marymount University, told The Post.
May’s payroll gain easily topped economists’ expectations for roughly 80,000 new jobs and came after the government revised March and April hiring figures higher by a combined 93,000 jobs.
President Trump appeared to tie the numbers to his long-standing calls for interest rate cuts.
“With a great Jobs Report, like just announced, stocks should go up, not down. That’s the way it was for 200 years. Growth does not mean inflation! How else can a Country attain GREATNESS???” he wrote on his social media platform Truth Social.
Stocks dropped, though, as investors took the strong jobs numbers to mean the Federal Reserve will keep interest rates high through the rest of the year.
The Dow closed down 695 points, or 1.4%. A tech selloff prompted the Nasdaq to decline 4.2% — ending its worst week in over a year — while the S&P 500 dropped 2.6%
The stronger-than-expected employment numbers suggest the labor market remains remarkably resilient despite concerns about slowing economic growth and uncertainty facing businesses.
With the World Cup coming to the US this summer, job gains were concentrated in leisure and hospitality. They added 70,000 positions in May. Local government added 55,000 jobs, while health care payrolls increased by 35,000.
The financial sector was one of the few weak spots, with 22,000 jobs shed.
Still, Sohn said the breadth of hiring in May was encouraging because job growth was not concentrated in a single industry.
“The key point is that job creation was not limited to one tiny corner of the economy,” he told The Post.
Average hourly earnings rose 0.3% in May and were up 3.4% from a year earlier, matching economists’ expectations.
The unemployment rate has now remained in a narrow range between 4.3% and 4.5% since July 2025, according to the Bureau of Labor Statistics.
The report arrived days after separate Labor Department data showed job openings climbed to 7.62 million in April, the highest level since May 2024 and a sign that demand for workers remains intact even as hiring has slowed.
The increase in openings was driven overwhelmingly by professional and business services, a broad category that includes many white-collar jobs. Openings in the sector jumped by 668,000 positions in April, accounting for roughly 90% of the nationwide increase.
But the April surge in job openings has yet to translate into a major hiring boom.
While employers posted more jobs, Labor Department data showed employment in professional and business services was little changed in May, suggesting companies may be searching for talent while remaining cautious about expanding payrolls.
Credit: Source link
