US employment growth surged in May, beating market expectations, while the unemployment rate remained steady, government data showed Friday, with the labor market in the world’s largest economy sustaining recent gains.
“Total nonfarm payroll employment increased by 172,000 in May, and the unemployment rate was unchanged at 4.3 percent,” the US Bureau of Labor Statistics said.
Economists polled by Dow Jones Newswires and the Wall Street Journal had expected job growth of 80,000 jobs.
Friday’s data release also revised job growth numbers for March and April upwards by a combined 93,000, a signal that the labor market may be exiting a recent period of turbulence.
Job growth in the United States has see-sawed between expansion and contraction from month to month over the last year, but May’s data marks the third straight month of increases.
The leisure and hospitality sector added 70,000 jobs last month, the new data showed, well above its average monthly gain of 14,000 over the last year.
The health care sector remained one of the labor market’s strongest performers, with 35,000 jobs added in May, in line with 12-monthly averages.
Employment in the financial activities sector, however, declined by 22,000, with losses concentrated in insurance and commercial banking.
The sector is down 107,000 jobs from its recent peak in May 2025.
The air transportation sector lost 9,000 jobs, after low-cost airline Spirit wound down its operations.
– Bond yields rise –
Yields on US Treasury bonds rose in response to the data, fueling market anticipation of interest rate hikes by the US Federal Reserve.
The yield on the 10-year Treasury bond jumped from 4.47 percent to 4.53 percent, while that of the two year bond climbed from 4.04 percent to 4.13 percent.
Central bank policymakers have been flagging rising concern at persistent higher-than-targeted inflation in the US economy, fuelled by US President Donald Trump’s war on Iran.
With the labor market’s recent strength, they will likely be more inclined to concentrate on the inflation side of the Federal Reserve’s mandate.
The US central bank has the dual mission of keeping inflation to its long-term two-percent target while also ensuring maximum employment.
Addressing inflation could require the Fed to raise interest rates in a bid to cool rising prices — a move certain to anger Trump.
The US president has launched an unprecedented assault on the Fed’s independence, demanding the central bank lower interest rates in order to boost economic activity.
New Fed chief Kevin Warsh will chair his first meeting of the Fed’s rate-setting committee later this month.