American employers added 172,000 jobs in May, exceeding economists' expectations and signaling a labor market recovery after last year's lull. The unemployment rate held steady at 4.3%, while revisions showed March and April added 93,000 more positions than previously reported. Average hourly earnings grew 3.4% from a year earlier, the slowest rate since August 2021.

Leisure and hospitality led job growth with 70,000 positions, potentially early hiring for the World Cup. Health care added 35,000 jobs, while local government surged with 55,000 positions. Federal employment has declined by about 350,000 since late 2024 as the administration squeezed net immigration to near zero.

May's robust report gives President Trump a talking point for the midterms while reducing the odds of Federal Reserve rate cuts. Job openings jumped in April, with initial claims remaining low despite high-profile layoffs at companies like Meta and Cisco. The Fed's rate-setting committee meets in two weeks with officials increasingly nervous about inflation.