May Jobs Beat Expectations

• Nonfarm payrolls increased by 172,000 in May, while the unemployment rate held steady at 4.3%, showing continued labor market resilience despite economic uncertainty.

• Temporary help employment rose for the fourth consecutive month, a potentially important leading indicator that businesses may be slowly rebuilding hiring pipelines after a cautious start to 2026.

• The latest JOLTS report showed job openings jumped to 7.62 million in April while layoffs remained historically low, reinforcing the view that employers are still holding onto workers even as hiring remains selective.

The May 2026 employment report showed a labor market that continues to hold up better than many expected heading into the summer. Employers added 172,000 jobs in May, well above forecasts, while the unemployment rate stayed at 4.3%. Healthcare, leisure and hospitality, and government hiring (on the local level, Federal hiring was up 1,000 jobs) once again carried much of the month’s gains, while financial activities remained under pressure. Revised data also showed March and April payroll gains were stronger than initially reported, reinforcing the idea that hiring momentum has stabilized after a shaky start to the year.

One of the more important trends beneath the headline numbers continues to be temporary help employment, which increased again in May. That marks the fourth consecutive monthly increase in temporary help services, a notable signal because temp hiring often turns before broader labor market trends do. The latest JOLTS report also pointed to a labor market that is still relatively healthy, with job openings climbing back above 7.6 million and layoffs remaining historically low. While the pace of hiring is not booming, employers still appear reluctant to cut workers aggressively, suggesting the economy is slowing gradually rather than falling into a sharp downturn.

For a deeper dive .....

• A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons eased to 8.1% in May.

• Prime age labor force participation rate (ages 25-54) remained at 83.8% in May.

• The overall labor force participation rate held steady at 61.8%. This remains well below pre-pandemic participation levels.

• In May, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3%, to $37.53. Over the year, average hourly earnings increased by 3.4%. Average hourly earnings of private-sector production and nonsupervisory employees rose by 8 cents, or 0.2%, to $32.31.

• The average workweek for all employees on private nonfarm payrolls remained unchanged at 34.3 hours in May. In manufacturing, the average workweek held at 40.4 hours, while overtime edged up to 3.1 hours. The average workweek for production and nonsupervisory employees remained at 33.8 hours.

• ADP reported that 122,000 private-sector jobs were added in May.