The US economy added a stronger-than-expected 172,000 jobs last month
By Alicia Wallace, CNN
(CNN) — The US labor market appears to have found its footing: The economy added 172,000 jobs in May, shattering expectations, new data from the Bureau of Labor Statistics showed Friday.
The latest jobs report provided some reassurance that the US labor market may be stabilizing after a year of weak and stilted job growth: Unemployment held steady at 4.3%, while employment gains topped 100,000 for the third consecutive month, a pattern not seen since early 2024.
Job growth was also far stronger than initially thought in recent months. March’s payroll gains were revised up by 29,000 to 214,000, while April’s tally was revised higher by 64,000 to 179,000 jobs added.
Following those upward revisions, employment gains ran at a 188,000-job clip for the past three months and a nearly 114,000-job monthly pace year-to-date – a far and welcome cry from last year, when fewer than 10,000 jobs were added each month.
Economists were expecting that employers added 105,000 jobs last month and that the unemployment rate wouldn’t budge from 4.3%.
Recent months’ data appears to indicate that the labor market and broader economy remain resilient despite a barrage of shocks. At the same time, consumer sentiment has hit rock-bottom: Americans already worn down by years of high inflation are feeling the squeeze from a war-driven cost crunch.
However, economists caution that a protracted war could keep gas prices high and cut into consumer spending, raise business costs, and trickle into higher prices for other goods and services.
Friday’s jobs report, despite showing stronger-than-expected employment gains, also showed that Americans could have a harder time keeping up with rising inflation.
Annual wage growth slowed to 3.4% in May from 3.6% the month before. Based on the latest projections for the May Consumer Price Index, which is due out next week, pay gains could be running nearly 1 percentage point below inflation.
“It’s difficult to celebrate an acceleration (of job growth) when one knows that real wages are falling, and that the median worker is likely having a very difficult time keeping up with their own obligations,” Joe Brusuelas, chief economist at RSM US, told CNN in an interview.
May’s job gains were slightly more broad-based than in prior months, as hiring ramped up in the leisure and hospitality sector as well as the public sector (specifically, local governments) in addition to the stalwart job-generator of healthcare, BLS data showed.
Leisure and hospitality added an estimated 70,000 jobs in May, more than double the gains in April for the industry; the government sector added 52,000 jobs (with local government, excluding education, accounting for 43,500 of those); and healthcare and social assistance added 47,200 jobs.
This story is developing and will be updated.
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