The Bureau of Labor Statistics reported that nonfarm payrolls in the U.S. increased by a seasonally adjusted 172,000 in May, a decrease from the upwardly revised 179,000 in April, and significantly above the Dow Jones consensus estimate of 80,000. The unemployment rate remained steady at 4.3%.
The report indicates that job gains have been concentrated in a few sectors, while layoffs have remained moderate. There are indications that artificial intelligence may be affecting labor rolls.
Federal Reserve officials have expressed a more positive outlook on the labor market, focusing on inflation concerns that have reduced the likelihood of further interest rate cuts. The Fed has maintained a cautious approach this year after reducing benchmark rates by 0.75% in late 2025.
Economic growth has been robust, with gross domestic product (GDP) increasing at an annualized rate of 1.6% in the first quarter and tracking at a 3% gain in the second quarter, according to the Atlanta Fed.