Jobs market booms with 172,000 jobs added in May as unemployment holds steady
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The U.S. economy added 172,000 jobs in May, while the unemployment rate held at 4.3%, the government said Friday.
Why it matters: The labor market is strengthening after months of lackluster jobs growth, confirming the economy is gaining momentum despite the economic fallout from the Iran war.
By the numbers: Jobs growth in May was more than double the 80,000 job gains that economists expected.
- The Bureau of Labor Statistics said payrolls in March and April were a combined 93,000 higher than initially estimated.
- With those revisions, the economy added 179,000 jobs in April and 214,000 jobs in March — a strong three-month stretch for the labor market.
- Job gains in May were concentrated in leisure and hospitality, health care and local government.
The big picture: Ahead of Friday's jobs report, other indicators suggested that the labor market was picking up steam.
- That includes a private sector reading that showed strong hiring and another government report that showed a surge in job openings in April.
The backdrop: The report lands ahead of the central bank's policy meeting on June 16-17, the first since new Federal Reserve chair Kevin Warsh took the helm.
- This week, some Federal Reserve officials said that they were less concerned about labor market risks. Instead, they are focused on stubbornly high inflation that has been made worse by the Iran war-related energy price surge.
- Financial markets are pricing in greater odds that the Fed raises interest rates this year, a huge shift from previous expectations of lower rates.
- "I am increasingly concerned that higher interest rates could be necessary later this year to fully restore price stability," Dallas Fed president Lorie Logan said in a speech this week.
The bottom line: The hiring slowdown in 2025 now looks like a blip, with May marking three straight months of booming jobs growth.
Editor's note: This story has been updated with additional details.
