The U.S. economy added 172,000 jobs in May’s better-than-expected report while the unemployment rate remained at 4.3%, according to data released Friday by the U.S. Bureau of Labor Statist.
The unemployment rate has remained steady in the range of 4.3% to 4.5% since July 2025, according to the bureau. The bureau revised its April increase to 179,000 jobs and March increased by 214,000 jobs.
Heather Long, chief economist at Navy Federal, said May’s report outperformed economists expectation that jobs would increase by 88,000.
“Another strong jobs report,” Long said. “There are a lot of encouraging signs for the labor market heading into summer.”
The hospitality sector showed the most growth in May, with an increase of 70,000 jobs throughout the month. Local government followed closely behind with 55,000 jobs.
The average monthly gain for hospitality jobs is 14,000 over the previous 12 months. May’s report greatly exceeds average growth in the hospitality sector.
The health care industry, typically a prime driver of job growth, added 35,000 jobs in May. The industry typically brings in 38,000 each month. The health care industry growth was driven by an increase of 26,000 jobs in ambulatory services and 11,000 jobs in home health care services.
Average monthly job gains in 2026 are 114,000, a steep increase from the 10,000 jobs per month average in 2025.
“Honestly, it looks like the hiring recession is over,” Long said. “Almost every industry is hiring again except tech and finance.”
The finance sector cut 22,000 jobs in May, reflecting a decrease of 107,000 jobs since May 2025. Job losses in finance were pushed by an 11,000 job loss from insurance carriers and a 3,000 job loss in banking.
Social assistance jobs increased by 12,000; Mining gained 5,000 jobs; and employment in transportation and warehousing was essentially unchanged in May.
However, wage growth over the last year ending in May 2026 was 3.4%, the lowest the U.S. economy has seen in the last five years. Long said the wage growth problem will be especially difficult as inflation is expected to be around 4%, due to the ongoing conflict with Iran.
“It’s easier to get a job now, but it’s hard to find a job where your pay will keep up with current inflation,” Long said.
