Exceeding expectations…the US economy added 172,000 jobs in May

The US economy added 172,000 jobs during May, significantly exceeding market expectations, indicating continued strength in the labor market despite the slowdown in the pace of hiring compared to the previous month.

The increase in non-farm jobs was much higher than analysts’ expectations, which indicated the addition of only 80,000 jobs, while the April reading was revised upward to 179,000 jobs.

The unemployment rate stabilized at 4.3%, in line with estimates.

The pace of employment witnessed an improvement across a number of sectors during May, with the leisure and hospitality sector topping the list of sectors adding the most jobs with about 70,000 jobs, far exceeding its monthly average over the past year.

Local governments also added 55,000 jobs, while the health care sector created 35,000 new jobs, in line with its usual average, while the social assistance sector added 12,000 jobs.

On the wages front, average hourly earnings rose by 0.3% on a monthly basis and by 3.4% on an annual basis, in line with Wall Street expectations.

The report comes at a time when American companies are adopting a cautious approach to hiring and firing, as hiring operations are still relatively limited, while the pace of layoffs remains at moderate levels, despite increasing indications of the impact of artificial intelligence applications in some jobs.

In recent days, the US Federal Reserve has shown greater satisfaction with labor market conditions, while their focus has increasingly shifted towards ongoing inflationary pressures, which has reduced expectations for further interest rate cuts in the coming period.

The US Federal Reserve kept interest rates unchanged this year, after reducing them by 75 basis points during the second half of 2025.

Monetary policymakers continue to emphasize a wait-and-see approach and wait for more economic data before making any new decisions on the interest rate path.

In terms of economic activity, the data showed the continued strength of the US economy, as the gross domestic product grew at an annual rate of 1.6% during the first quarter, while estimates by the Federal Reserve Bank in Atlanta indicate the possibility of recording growth of about 3% during the second quarter.