The economy added 172,000 jobs in May, more than economists had expected. The unemployment rate stayed at 4.3%.
With revisions, March and April added 93,000 more jobs than previously reported.
That puts average job growth in 2026 at about 114,000 per month, much stronger than the 10,000 average last year. That’s much faster than the rate at which people have been coming into the labor market because the Trump administration has squeezed net immigration to near zero.
“May’s report was great news for the economy,” Bill Adams, chief economist at Fifth Third Commercial Bank, told the New York Times. “If job growth holds at this stronger pace, the economy is heading for a lower unemployment rate, and possibly labor shortages.”
But the report wasn’t great news for stocks or bonds. The S&P 500 fell 2.6% on Friday, its worst one-day drop since October. The drop dragged the index to a loss of around 2% for the week, ending a run of nine consecutive weekly gains, its longest streak since the end of 2023.
The Nasdaq 100 sank about 5%, the most since April 2025. A gauge of chipmakers tumbled 10%.
The yield on the 10-year Treasuty rose 7 basis points to 4.54%.
The worry, of course, is that today’s strong jobs report will mean that the Federal Reserve not only won’t cut interest rates this year but might actually raise rates before the end of 2026.The bond market is pricing in one 25-basis-point increase by the end of 2026.
Job gains in the month were led by leisure and hospitality, which tacked on 70,000 jobs. Some of that was early hiring for the World Cup as cities across the country prepared for an influx of tourists. Health care, which has been the steady fuel of job growth, added another 35,000 positions.
The Fed next meets on interest rates on June 17.
