U.S. Employers Add 172,000 Jobs in May as Labor Market Shows Mixed Signals

U.S. employers added 172,000 jobs in May, exceeding analyst forecasts and extending the stronger pace recorded in March and April. Average monthly job growth from March through May reached nearly 190,000, three times the roughly 63,000 average recorded a year earlier.

The labor market had weakened late in 2025 and into early 2026, when employers cut an average of 4,300 jobs per month from December through February. Corporate earnings growth reached about 28 percent in the first quarter, and 85 percent of S&P 500 companies beat profit estimates—the highest share in nearly five years, FactSet reported.

Corporate earnings growth has averaged 11 percent over the past two years, and analysts now project 22 percent growth for the second quarter.

The Republicans’ One Big Beautiful Bill lowered corporate taxes and added other breaks that analysts said supported profitability. Health care added 610,000 jobs over the past twelve months, the largest gain of any sector, according to Indeed. Leisure and hospitality added 240,000 jobs over the same period and 70,000 jobs in May alone.

Local government added 55,000 jobs in May, which Dominic Pappalardo of Morningstar Wealth attributed to summer staffing needs for parks, public works, and other operations. ” The increase in health care employment reflects demand from an aging population, with the oldest baby boomers approaching 80, Ullrich said.

” Pappalardo called the hiring in leisure and hospitality “a positive sign for overall economic activity” ahead of summer travel and the 2026 World Cup, which begins in June.

Government employment fell by 174,000 over the past year and financial services lost 107,000 jobs, according to Indeed. Seven sectors posted year-over-year employment gains and seven recorded losses. Nearly 28 percent of unemployed workers in April had been jobless for more than six months—the largest share since December 2021.