The U.S. economy added 172,000 jobs in May, more than double the 80,000 economists had projected, as the labor market continued its low-hire, low-fire pattern despite mounting pressure from inflation tied to the Iran war.
Sector gains and losses:
Leisure and hospitality led all sectors with 70,000 new jobs, well above its 12-month average of 14,000 per month, with food services and drinking places accounting for 48,000 of those gains.
Local government added 55,000 jobs, largely outside of education, and health care added 35,000, roughly in line with its 12-month average of 38,000.
Social assistance added 12,000 jobs and mining, quarrying, and oil and gas extraction added 5,000.
Financial activities lost 22,000 jobs and is down 107,000 since a recent peak in May 2025; air transportation lost 9,000 jobs, largely reflecting a business closure.
Unemployment:
The unemployment rate held steady at 4.3%, where it has remained in a narrow range since July 2025, with 7.3 million people unemployed.
Long-term unemployment (27 weeks or more) held at 2.0 million but is up 524,000 over the year, accounting for 27.5% of all unemployed people.
The labor force participation rate held at 61.8%.
Wages and workweek:
Average hourly earnings rose 0.3% in May to $37.53, and are up 3.4% over the past year, putting wage growth below April's inflation rate of 3.8%.
The average workweek held steady at 34.3 hours.
Revisions:
March payrolls were revised up by 29,000 to 214,000, and April was revised up by 64,000 to 179,000, adding a combined 93,000 jobs to prior estimates.
If recent data trends continue, it may soon be appropriate for policy to act to address the growing risks of persistently elevated inflation."
Read more via Bureau of Labor Statistics, CNBC, NBC News
NOTE: The ADP Employment Report and the Bureau of Labor Statistics Jobs Report utilize different data, and therefore provide differing reports. ADP's report includes only private sector data.
ADP's May report showed private sector hiring came in above expectations, with employers of all sizes adding jobs and eight of ten industry “supersectors” posting gains.
Education and health services led all sectors with 57,000 new jobs, continuing its recent pattern as the dominant driver of private sector growth.
Trade, transportation, and utilities added 36,000 jobs; professional and business services added 11,000; and leisure and hospitality added 8,000.
Construction added 8,000 and manufacturing added 3,000, while information shed 9,000 jobs and natural resources and mining lost 3,000.
Regional and size breakdown:
The West led all regions with 45,000 new jobs, followed by the Northeast with 35,000, the South with 23,000, and the Midwest with 21,000.
Small establishments (fewer than 50 employees) accounted for 67,000 of the month's gains; large establishments (500 or more employees) added 40,000; medium establishments added 17,000.
Pay:
Year-over-year pay growth for job-stayers held steady at 4.4 percent for the second consecutive month.
Pay growth for job-changers slowed slightly to 6.5 percent from 6.6 percent in April.
Hiring was more broad-based in May than we've seen in the last few years. The labor market continues to show sustained momentum going into the summer hiring season."
Read more via ADP, The Wall Street Journal
Job openings jumped to 7.6 million in April, the highest level since May 2024, but the surge was driven almost entirely by a record spike in professional and business services.
Job openings:
Openings rose from 6.9 million in March to 7.62 million in April, well above the Bloomberg economist median estimate of 6.87 million.
Professional and business services accounted for more than 90 percent of the overall increase, adding 668,000 openings to reach a three-year high.
Set aside professional and business services, and openings rose by just over 60,000.
The ratio of job openings to unemployed workers held at 1 to 1, little changed from recent months and down sharply from a peak of 2 to 1 in 2022.
Hires:
Hires fell to 5.1 million in April, a decline of more than 400,000 from March's 26-month high.
Separations:
Total separations fell to 5.0 million, with retail trade accounting for most of the decline.
Quits held at 3.0 million, with a quits rate of 1.9 percent, matching the lowest level since 2020.
Layoffs and discharges were little changed at 1.7 million, with the layoff rate staying near an all-time low for the third consecutive month.
March job openings were revised up by 21,000 to 6.9 million; hires were revised down by 19,000 to 5.5 million.
Read more via BLS, Bloomberg, MarketWatch
Politicians, tech executives, and state governments are racing to get ahead of AI's potential impact on workers, floating proposals ranging from sovereign wealth funds to token taxes to executive orders, even as the displacement they're preparing for remains more anticipated than documented.
An Economist/YouGov poll released this week found 41% of respondents believe AI will have a negative economic impact, compared with just 17% who believe it will be positive.
Sen. Bernie Sanders plans to introduce legislation requiring a one-time 50% equity transfer from the largest AI companies to the federal government, giving it voting shares and board seats at OpenAI, Anthropic, and xAI; the proposal does not address how the tax would apply to private companies with no publicly traded shares.
Sen. Elizabeth Warren called for taxing AI companies, including via data centers, to fund universal healthcare, education, and expanded unemployment insurance.
Rep. Greg Casar separately proposed a "token tax" on AI usage that would automatically generate more revenue as AI-related layoffs increase.
OpenAI has floated its own version of the idea: a voluntary public wealth fund that would give every American a stake in AI's economic growth, funded through higher taxes on capital gains and AI-driven returns.
California Gov. Gavin Newsom signed an executive order directing state agencies to track AI's workforce impacts and explore severance standards, worker ownership models, and universal basic capital concepts; the Employment Development Department was directed to launch a sector-by-sector AI employment dashboard within 90 days.
OpenAI CEO Sam Altman said last week he does not expect AI to cause a "jobs apocalypse" and is "delighted to be wrong" about earlier predictions, while a bipartisan Senate bill introduced last November would require major companies to report AI-related layoffs to the Department of Labor.
Read more via The Hill, HR Dive, Yahoo Finance
U.S. employers announced 97,006 job cuts in May, the highest total for that month since the pandemic, with artificial intelligence cited as the leading reason for the third consecutive month, according to Challenger, Gray & Christmas.
AI was attributed to 38,579 cuts in May, accounting for 40 percent of all announced cuts and marking the highest monthly total for the reason since Challenger began tracking it in 2023; that share has risen sharply from 7 percent in January and 26 percent in April.
For the year, AI has been cited in 87,714 cuts, or 22 percent of all 2026 layoffs, already surpassing the 54,836 attributed to the reason in all of 2025.
Technology led all sectors with 38,242 cuts in May, its steepest monthly total since August 2024, bringing its year-to-date total to 123,653, up 66 percent from the same period in 2025.
Pharmaceutical companies announced 5,045 cuts in May, up 753 percent year-over-year, and FinTech announced 5,731 cuts, the bulk of which cited AI.
Year-to-date cuts of 397,755 are down 43 percent from the same period in 2025, when DOGE-related federal workforce reductions drove totals to historic highs; stripping out that distortion, 2026 is running roughly even with 2024.
The labor market is being reshaped by technology in real time. AI is now the leading reason companies give for cutting jobs and the primary industry citing it is Technology."
Read more via Challenger, Gray & Christmas, The Wall Street Journal
Advertised wages for salaried positions grew at 2.9 percent between Q1 2025 and Q1 2026, compared to just 1.7 percent for hourly roles, according to an Indeed Hiring Lab analysis of millions of job postings.
The gap holds across nearly all high-paying white-collar sectors and several blue-collar occupations where both pay structures coexist.
Hourly wage growth was negative in several STEM sectors, including software development, IT, data and analytics, and industrial engineering, as well as in marketing and sales.
Entry-level workers, contractors, freelancers, and interns are more likely to be hired on an hourly basis in these sectors, meaning slower wage growth compounds existing disadvantages at the start of careers.
Read more via Indeed Hiring Lab
The eurozone's unemployment rate remained unchanged at 6.3 percent in April, with the number of unemployed people falling by 84,000 compared with March, even as the Iran war continued to pressure energy costs and business confidence across the bloc.
Read more via The Wall Street Journal
For nearly a decade, South Asian workers on H-1B visas drove one of the biggest housing booms in the country in the suburbs north of Dallas. That boom is rapidly unwinding as federal and state governments tighten visa restrictions and tech companies cut workers in favor of AI.
Indian buyers once accounted for 70 percent of sales at one North Dallas builder; they have since dropped below 30 percent, leaving a backlog of 125 luxury properties under construction.
Home prices in Collin County suburbs dropped nearly 9 percent year-over-year in February, more than double the 4 percent decline across the broader Dallas metro.
Those on H-1B visas who lose their jobs have 60 days to find a new sponsor or risk having to leave the country, creating pressure to sell into a falling market or absorb monthly losses as landlords.
Read more via Bloomberg
The Trump administration proposed new tariffs of at least 10 percent on goods from the EU, UK, Canada, Mexico, and more than a dozen other trading partners, citing their alleged failure to address imports made with forced labor.
China, Japan, and India would face a higher rate of 12.5 percent because they do not prohibit forced labor imports and have not committed to do so through a deal with the administration.
The proposed tariffs are based on a Section 301 investigation and are designed to replace reciprocal tariffs that are set to expire in late July following a Supreme Court ruling earlier this year that stripped a key White House tariff tool.
Canada and Mexico are included on the list, but goods compliant with the U.S.-Mexico-Canada trade agreement would be exempt; a majority of both countries' exports to the U.S. qualify.
The EU, which struck a deal last summer to cap U.S. tariffs on its goods at 15 percent, called the proposed levies unjustified and said it expects the U.S. to honor the terms of that agreement.
The proposed tariffs are subject to public comment and could still change.
The Paychex Small Business Jobs Index rose for the third consecutive month in May, reaching its highest level of 2026 and marking the first three-month improvement streak since February 2023.
Weekly earnings growth reached 2.98 percent, its highest level since January 2024, and has risen for five consecutive months.
Weekly hours worked grew for the third straight month, the first such streak since April 2021.
Education and health services led all sectors for small business job growth, a position it has held nearly every month since 2024.
Read more via Paychex
The Institute for Supply Management's purchasing managers index rose to 54 in May, its highest reading since May 2022 and above analyst expectations of 53.2, as new orders expanded for the fifth consecutive month. Readings above 50 indicate expansion; the production index also continued to grow and the backlog of orders increased from April.
Canada: Canada entered a technical recession for the first time since the Covid-19 pandemic after GDP contracted 0.1 percent annualized in the first quarter, following a downwardly revised 1 percent contraction in the fourth quarter of 2025. The Bank of Canada has held its policy rate at 2.25 percent for four straight meetings, and Friday's data further reduced expectations of a rate hike despite elevated energy prices. (Bloomberg)
Denmark: The Danish government proposed a pilot program to test whether weight-loss drugs like Wegovy can improve labor force participation among people with severe obesity, following a similar five-year trial launched by the UK with Eli Lilly in 2024. Research presented last year estimated the active ingredient in Wegovy and Ozempic could generate more than £4.5 billion in annual productivity gains in the UK alone. (Bloomberg)
Finland: Finland's seasonally adjusted unemployment rate rose to 10.6 percent in May, the highest level since at least 2000, as the Iran war weighs on the export-driven economy and weak demand for summer workers compounds the pressure. Young people have been hit particularly hard, with long-term youth unemployment rising even as that trend typically concentrates among older workers. (Bloomberg)
Ireland: The Irish economy contracted 12.1 percent in the first quarter, far worse than an initial estimate of 2 percent, driven by a decline of more than one-third in factory output concentrated among multinational enterprises. The revised figure is expected to pull eurozone GDP into contraction when Eurostat releases updated numbers. (The Wall Street Journal)
Spain: Unemployment fell to 2.32 million in May, the lowest level for that month since 2007, while Social Security membership hit a record 22.3 million registered workers after 64 consecutive months of growth. Hospitality drove the most new registrations, adding nearly 66,000 contributors as the summer tourism season ramped up, and youth unemployment dropped to its lowest level since records began. (Euronews)
Switzerland: A referendum on June 14 would cap Switzerland's population at 10 million, requiring annual migration to fall by more than half to stay below the threshold through 2050. Lombard Odier warned the initiative, if implemented as written, would put bilateral accords with the EU at risk and undermine labor supply across manufacturing, finance, and technology sectors that increasingly depend on foreign workers. (Bloomberg)
United Kingdom: Youth unemployment is forecast to reach 17.8 percent in 2027, up from 16.9 percent this year, according to the British Chambers of Commerce, which cited higher payroll taxes, minimum wage increases, and AI adoption displacing entry-level workers as the main drivers. A former Labour cabinet minister warned last week that the UK risks creating a "lost generation," with as many as 1.25 million young people out of work or education by the early 2030s. (The Times)
