U.S. Nonfarm Payrolls Rise by 172,000 in May, Surpassing Expectations
By TopHolding Editorial · Friday, June 5, 2026 at 12:00 AM
U.S. nonfarm payrolls expanded by 172,000 in May, significantly exceeding consensus forecasts. The unemployment rate held steady at 4.3%, while average hourly earnings increased by 0.3%.
Nonfarm payrolls in the U.S. rose by 172,000 in May, considerably surpassing the anticipated gain of 88,000 and indicating a robust labor market. Downward revisions to March and April payroll figures, totaling 93,000, resulted in a net increase of 265,000 for the period. This strong performance suggests continued momentum in the labor market, despite ongoing economic adjustments.
Private sector payrolls contributed significantly to this growth, increasing by 120,000 in May, with prior months' figures also revised upward by 66,000. Key sectors driving job creation included leisure and hospitality (+70,000), health care and social assistance (+47,000), and construction (+17,000). Manufacturing also saw an increase of 7,000 jobs, while government employment expanded by 52,000. These figures highlight broad-based job growth across various industries.
The unemployment rate remained unchanged at 4.3% in May, signaling a stable employment environment. Civilian employment, an alternative measure that includes small-business startups, rose by 149,000. This series, though subject to monthly volatility, indicates that entrepreneurial activity is contributing to overall job creation. The labor force, encompassing both employed and job-seeking individuals, increased by 83,000, underscoring the dynamic nature of the U.S. job market.
Average hourly earnings saw a 0.3% increase in May, bringing the year-over-year growth to 3.4%. While wages are rising, the pace may be struggling to keep up with recent inflationary trends, which, though considered temporary, are impacting consumer purchasing power. Aggregate hours worked advanced by 0.1% in May, representing a 0.9% increase over the last year. Looking ahead, the labor market is expected to sustain job gains in the coming months, albeit potentially at a more moderate pace than observed in May. Recent data also shows initial jobless claims climbing by 13,000 to 225,000, while continuing claims decreased by 8,000 to 1.777 million.
Key terms
1. Nonfarm Payrolls: A measure of the total number of paid employees in the U.S., excluding farm workers, government employees, private household employees, and non-profit organization employees. It is a key indicator of economic health and labor market conditions.
2. Unemployment Rate: The percentage of the total labor force that is unemployed but actively seeking employment and willing to work. It is a crucial measure of labor market slack and economic performance.
3. Average Hourly Earnings: The average amount of money earned by employees per hour, excluding irregular bonuses, commissions, and fringe benefits. This metric provides insight into wage growth and inflationary pressures within the economy.