U.S. employers added far more jobs than forecasters expected as the job market extended its rebound from its tariff-driven slump of 2025 and early this year.

Jobs Report Shows Hiring Shot Up in May as Labor Market Continues to Rebound

May Employment Numbers Blow Past Economists' Expectations

Updated June 05, 2026

11:04 AM EDT

Key Takeaways

U.S. employers added 172,000 jobs in May, far exceeding economists' estimates.
Job numbers for the previous two months were also revised sharply upward, crushing the case for the Fed cutting its benchmark interest rate to bolster the job market.
The labor market has now added jobs for three months in a row, the first time that's happened since May 2025.

Forecasters were expecting the job market to extend its recent rebound. Instead, it shot up like a rocket.

U.S. employers added 172,000 jobs in May, while the unemployment rate remained at 4.3%, relatively low by historic standards, the Bureau of Labor Statistics said Friday.1 The magnitude of job creation was more than double the 80,000 forecasters had anticipated according to a survey of economists by Dow Jones Newswires and the Wall Street Journal.2

On top of that, April's job creation figures were increased to 179,000 from the 115,000 previously announced, while for March, the total was revised upward to 214,000 from 185,000. The labor market has now added jobs for three months in a row, the first time that's happened since May 2025.3

The solid hiring figures mark a distinct turnaround from last year and early 2026, when the market alternated between gaining and losing jobs each month and was pretty much treading water, as tariff-related uncertainty discouraged employers from expanding and bringing on new staff.

"The hiring recession is over," Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. "This is encouraging news for job seekers and for the U.S. economy. The labor market has stabilized and is showing early signs of a genuine rebound."

What This Means For The Economy

Surging job creation puts the economy on more-solid footing, while all but eliminating the chances the Federal Reserve will cut interest rates any time in the foreseeable future.

Data Raises Expectations for Interest Rate Hike

The surge of job creation all but extinguished any hopes in financial markets that the Federal Reserve will cut its key interest rate any time soon.

Earlier in the year, Fed officials had been pulled in opposite directions by the two halves of its dual mandate to keep prices stable and employment high as the job market faltered and inflation accelerated. Now that the signs of weakness in the job market have faded, the Fed is free to focus on inflation, exacerbated by the Iran war's boost to fuel prices. Fighting inflation would mean keeping the fed funds rate higher for longer, or, more likely than not, raising it.

Traders are pricing in a two-thirds chance of a rate hike by the end of the year according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data.4

"We've gained more and more confidence in the last prints that the Fed doesn't have to be worried about the labor market," Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management, wrote in a commentary. "Laser focused on inflation and it will all come down to the duration of this War to determine the Fed's next move."

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Job Growth Happening in Many Sectors

The job creation in May was widespread across industries, unlike in past months, where hiring was concentrated in education and healthcare.

Leisure and Hospitality led the way with the addition of 70,000 jobs, while Governments added 52,000 jobs, the most since July 2024. Health care and social assistance was in third place, adding 47,000 positions. Even the manufacturing sector added 7,000 jobs and stayed in positive territory for the year after losing jobs every month in 2025.

The job market isn't totally out of the woods, however. Some forecasters saw risks that the Iran war threatens to drag down hiring, just as it pushes up inflation, if the conflict isn't resolved soon.

"The ongoing oil price shock and economic uncertainties of war are weighing and will continue to weigh on the economy," Elizabeth Renter, senior economist at NerdWallet, wrote in a commentary. "We haven't seen the end of that, and there's a chance that the longer it continues, the less vigor employers have for investment and hiring."

UPDATE: This article has been updated after initial publication to include additional details from the monthly employment report, as well as comments from economists.

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Bureau of Labor Statistics. "Employment Situation Summary."
MarketWatch. "U.S. Economic Calendar."
Bureau of Labor Statistics via Federal Reserve Economic Data. "All Employees, Nonfarm."
CME Group. "FedWatch Tool."

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