The U.S. economy added jobs at a modest pace in May amid uncertainty over the impact of the Middle East conflict on the job market.
What are the main findings of the May 2026 jobs report?The Bureau of Labor Statistics reported Friday that employers 172,000 jobs added in May. This figure is higher than the estimates of economists surveyed by LSEG, who predicted a gain of 85,000 jobs.
THE unemployment rate remained stable at 4.3%, which was in line with the expectations of LSEG economists.
Job growth in the U.S. economy in May exceeded economists’ expectations. (Chet Strange/Bloomberg via Getty Images)
Revisions were made to the payroll figures for the previous two months, with March revised up by 29,000, from a gain of 185,000 to a gain of 214,000; while the April report was revised upward by 64,000, from a gain of 115,000 to 179,000.
Taken together, employment in March and April was 93,000 more jobs than previously reported.
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Which sectors created or lost the most jobs in May 2026?Private sector payrolls added 120,000 jobs in May, well above the LSEG poll’s forecast of 85,000 jobs. April’s gain of 123,000 jobs was revised to 177,000 jobs, while March’s gain of 190,000 jobs was revised to 202,000.
Government payroll increased by 52,000 jobs in May. Local government is responsible for most of that increase, adding 55,000 jobs for the month, compared to 1,000 jobs added by the federal government. Those gains were partially offset by a drop of 4,000 jobs in state government.
THE manufacturing sector 7,000 jobs were added in May, exceeding the gain of 2,000 jobs expected by LSEG economists.
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Health care 35,200 jobs were added in May, roughly matching the average monthly gain of 38,000 jobs over the past 12 months. Most of these gains occurred in outpatient health care services (+25,700) and hospitals (+6,000).
Social assistance created 12,000 jobs in May, mainly in individual and family services (+9,600). The sector created an average of 17,000 jobs per month over the past year.
THE financial activities The sector lost 22,000 jobs in May and the sector is down 107,000 jobs from its recent peak in May 2025. Most of the job losses occurred in insurance companies (-10,700) and commercial banks (-2,600).
The manufacturing sector created more jobs than expected in May. (Emily Elconin/Bloomberg via Getty Images)
What does the May 2026 jobs report mean for the workforce?The number of long-term unemployed, defined as those who have been out of work for 27 weeks or more, changed little over the month at 2 million but is up 524,000 from this year. The long-term unemployed represented 27.5% of all unemployed in May.
The number of people part-time employee for economic reasons, the population changed little in May, with 4.8 million people. These people would have preferred full-time employment, but worked part-time because their hours were reduced or because they were unable to find full-time employment.
The activity rate remained stable at 61.8% in May, while the employment-population ratio changed little at 59.2%. Both measures have changed little over the past year after accounting for population control adjustments.
The Fed’s preferred inflation gauge remained high in April
What experts say about the May 2026 jobs reportLindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, called the May jobs report a “payroll explosion!” » and added: “We are increasingly convinced in the latest publications that the Fed does not have to worry about the labor market. Laser focused on inflation and everything will depend on the duration of this war to determine the Fed’s next decision. For now, the decision is to not move: HOLD.”
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Seema Shah, chief global strategist at Principal Asset Management, said the jobs report “reinforces that there is little reason for an easing bias from the Fed.”
“Job creation above 150,000 – well above the Fed’s breakeven estimate and also broad-based in nature – is accompanied by inflation that remains above target and is expected to increase in the coming months. Indeed, both sides of the Fed’s dual mandate oppose cuts at this point,” Shah added.
