Key facts
- US economy added 172,000 jobs in May.
- Unemployment rate remained steady at 4.3% in May.
- Nonfarm payrolls increased by 172,000 jobs in May.
- Labor market shows traction after previous slowdown.
- Businesses are cautious about hiring due to uncertainty from tariffs and the U.S.-Israeli war with Iran.
The U.S. economy added 172,000 jobs in May, exceeding economists' expectations and indicating a strengthening labor market. This figure follows an upwardly revised 179,000 jobs added in April. The unemployment rate held steady at 4.3% for the third consecutive month. Economists estimate that between 0 and 50,000 jobs per month are needed to keep pace with the working-age population, a rate that has been impacted by reduced labor force growth due to an immigration crackdown. Businesses are exhibiting caution in hiring, influenced by past tariffs and the current U.S.-Israeli war with Iran, which has led to increased oil prices. Despite these uncertainties, fiscal stimulus in the form of tax and tariff refunds has supported corporate profits, allowing companies to avoid large-scale layoffs. Financial markets anticipate the Federal Reserve will maintain its benchmark interest rate between 3.50% and 3.75% into 2027.