U.S. payrolls rose by 172,000 in May, much more than expected; unemployment at 4.3%

Job growth unexpectedly surged in May as the U.S. labor market continued a solid year of expansion, the Bureau of Labor Statistics reported Friday.

Nonfarm payrolls jumped a seasonally adjusted 172,000 for the period, down slightly from the upwardly revised 179,000 in April and far above the Dow Jones consensus estimate for 80,000. The unemployment rate held steady at 4.3%, as expected.

The report came against a background of muted expectations as employers have held their ground in a low-hire, low-fire environment. While job gains have been largely concentrated in just a few sectors, layoffs also have been moderate, though some signs are building that artificial intelligence is having an impact on labor rolls.

In recent days, Federal Reserve officials have become more sanguine on the labor picture, turning their attention more to a nettlesome inflation problem that has largely taken the prospect for additional interest rate cuts off the table. The central bank has been in a holding pattern this year after lowering benchmark rates by three-quarters of a percentage point during the latter part of 2025.

Fed policymakers largely have stuck to a narrative of waiting to see how developments play out this year before committing to a policy path.

Broader economic growth has been solid, with gross domestic product rising at a 1.6% annualized rate in the first quarter and thus far tracking at a 3% gain in the second quarter, according to the Atlanta Fed.

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