JOBS REPORT BLOWS PAST EXPECTATIONS AGAIN IN BOOST FOR TRUMP
The government’s latest employment report has revealed that hiring trends in the United States were far stronger than expected in May, and that unemployment is holding steady despite fears that the war with Iran and other economic headwinds could be translating into difficulty for America’s labor market.
According to the figures from the Bureau of Labor Statistics (BLS) released on Friday, the U.S. economy added 172,000 jobs in May, following a 179,000 gain in April—revised up from an initially reported 115,000. Prior to the release, analysts had penciled in an 85,000-job lift.
This marks the third straight month of better-than-expected readings. Even with their originally reported totals, March and April’s releases also came in well ahead of analyst forecasts.
The unemployment rate, meanwhile, remained at 4.3 percent, in line with expectations. This is up from 4 percent flat at the beginning of President Donald Trump’s second term, but down from a recent peak of 4.5 percent in November.
Why This Report Matters
Despite February’s 156,000-job loss, three successive strong reports indicate that the labor market may be building momentum in 2026, after 2025 proved to be the weakest year for job creation since the pandemic and the worst outside a recession since 2003.
The White House has celebrated Friday’s findings, and the economist Stephen Moore, a former campaign adviser to Donald Trump, argued the “blowout” figures were an endorsement of “Trumponomics.”
But while robust hiring trends have staved off fears of an imminent labor market slowdown, analysts say this—combined with heightened concerns over inflation—will dissuade policymakers at the Federal Reserve from cutting rates anytime soon.
What Was in Friday’s Jobs Report?
In Friday’s report, figures for March and April were revised up by 29,000 and 64,000—to 214,000 and 179,000, respectively—meaning job gains were 93,000 higher for these months than originally reported.
Taken together, the U.S. economy is adding around 114,000 jobs per month on average in 2026, compared to 36,400 for the first five months of 2025 and roughly 10,000 for the full year.
For May, gains were concentrated in leisure and hospitality (+70,000), local government (+55,000) and health care (+35), which has long served as one of the main engines of job creation in the U.S. However, the BLS said that employment dropped by 22,000 in the financial activities sector.
Friday’s report follows a string of data that appears to contradict the “low-hire, low-fire” labor landscape diagnosis in the U.S.
Last week, the Bureau of Labor Statistics announced that job openings jumped to 7.6 million in April from around 6.9 million in March, far outpacing forecasts and reaching their highest level since May 2024.
But there are also signs that cuts are on the rise.
May saw 97,006 announced layoffs, according to a report from the outplacement firm Challenger, Gray & Christmas, a 16 percent increase from April and the highest total for the month since 2020. In 2026 so far, U.S. employers have announced 397,755 job cuts, a 43-percent drop from last year. But 2025’s numbers were boosted by federal layoffs and the actions of the now-disbanded Department of Government Efficiency (DOGE). Adjusting for this “distortion,” the firm said that 2026 layoffs are broadly in line with 2024 levels.
And given the relative robustness of the labor market, analysts believe the Federal Reserve will now prioritize addressing inflation and have little reason to lower rates at its next meeting.
Daniel Casali, chief investment strategist at the wealth management firm Evelyn Partners, said that the data “points to a recovery in employment growth, providing a conducive backdrop for both economic activity and corporate earnings.”
However, he added that an “improved labor market” has weakened the odds of a rate cut and boosted chances of a hike at the Fed’s next meeting in mid-June.
“America’s blockbuster jobs numbers are a huge achievement for the President, but they have vapourised any chance of him getting the interest rate cut he so desires,” James Bentley, director at Financial Markets Online, wrote in a press note following the release.
“Once the high-fiving subsides, the market’s focus will switch firmly back to inflation,” he added.
Annual inflation jumped to 3.8 percent in April, driven largely by a war-related increase in fuel prices, marking the highest rate across either of Trump’s terms and surpassing wage growth over the previous 12 months.
The BLS will publish its next inflation reading on June 10. Consensus forecasts currently point to another increase in the headline, annual rate to 3.9 percent for May, but expect the monthly rate will slow to 0.4 percent from 0.6 percent.
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2026-06-05T11:18:43Z
