U.S. labor report for May shows a surprising 172,000 jobs added to the economy

U.S. employers added a surprising 172,000 jobs in May as the labor market continued to show resilience in the face of rising costs from the Iran war.The Labor Department reported Friday that job growth was down slightly last month from a revised 179,000 in April. The unemployment rate stayed at a low 4.3%Hiring has bounced back this year from a miserable 2025, showing unexpected strength in the face of economic uncertainty and painfully high energy prices caused by the Iran war.Unemployment remained at a low 4.3% in May.The job gains were broad-based. Local governments added 55,000 workers, restaurants and bars 48,000, healthcare companies 35,000.In another sign of job market strength, Labor Department revisions added a combined 93,000 jobs in March and April. Monthly job gains have now topped 100,000 for three straight months.“The hiring recession is over. American firms are hiring again,” said Heather Long, chief economist at Navy Federal Credit Union. The job rebound is happening in almost every industry … This is encouraging news for job seekers and for the U.S. economy. The labor market has stabilized and is showing early signs of a genuine rebound.”Despite the pickup in hiring, wage gains were modest, which could reassure the inflation fighters at the Federal Reserve. Average hourly wages rose 0.3% from April and 3.4% from May 2025, consistent with the Fed’s 2% inflation target.Financial markets retreated after the report came in, likely reflecting expectations that the Fed won’t see a need to cut interest rates this year because hiring is so healthy.Workers, jobseekers and employers have been stuck in an awkward “no-hire, no-fire” labor market. “Those who have jobs are clinging to them, while those without are left wanting,” Diane Swonk, chief economist at the tax and consulting firm KPMG, wrote in a commentary ahead of the jobs report. “The result is a sense of being frozen or left in a sort of labo