The U.S. economy added 172,000 jobs in May, a surprisingly strong gain for the economy, even as employers grapple with elevated prices.
The unemployment rate held at 4.3 percent, according to data released Friday by the Bureau of Labor Statistics.
The May report blew past estimates of around 80,000 job gains.
The economy also picked up more jobs than expected in March and April, as the Bureau of Labor Statistics revised those months up by 93,000 jobs combined, far more than originally reported.
It marks first time the economy has added jobs for three consecutive months in a year.
The labor market been growing at a stable but modest pace in 2026 compared to the years coming out of the pandemic, with lower unemployment but also weaker job growth outside of the health care industry.
Economists had been searching for signs the labor market might pick up again, after years of softening that has weighed on younger workers and those who have been unemployed for months. But some analysts expect the labor market to remain sluggish, with slowing hiring and few layoffs, showing no real momentum.
Recent data has shown mixed signals. Job openings surged to the highest level in April since 2024, according to a separate report released Tuesday.
“The increase in job openings is a welcome surprise,” said Ken Kim, senior economist at KPMG. “But if you look at the openings on a longer-term basis, like three, six-month, 12-month trends, it’s still pretty flat. … I would still characterize this labor market as steady.”
Meanwhile, the number of Americans filing for unemployment benefits, a proxy for rising joblessness, rose to the highest level in four months last week, according to another Labor Department report released Thursday.
The full effects of U.S. war with Iran are still trickling into the economy. But if inflation, especially gas prices, continue to rise, consumers could pull back on spending, pushing up the unemployment rate in future months, economists say.
For now, consumer spending remains hardy, as some Americans are flush with cash from robust tax returns.
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