Research
June 05, 2026
Total U.S. jobs
U.S. employment grew robustly in May, reflecting resilience in the labor market
Nonfarm payrolls rose a robust 172,000 in May—well above the consensus forecast of 80,000—and built on solid gains in the prior two months. While monthly job growth has been uneven since late 2025, employment has expanded in four of the past five months, for a net increase of 569,000 year-to-date, underscoring the U.S. economy’s resilience despite elevated uncertainty.
Sustained gains in employment and wages remain critical support for consumer spending, and any deterioration could weigh on overall activity. Restaurant operators are closely tracking these trends as they navigate softer-than-desired demand; continued labor market strength should help support spending and traffic in the months ahead.
However, downside risks persist, including higher energy costs, ongoing inflationary pressures, and geopolitical uncertainty. Moreover, firm job growth, especially alongside elevated prices, complicates the Federal Reserve’s path, making interest rate cuts less likely this year and potentially raising the risk of further tightening. For now, the Federal Open Market Committee is expected to keep rates unchanged for the foreseeable future, with rate hikes or cuts both unlikely in the near term.
At the same time, the civilian labor force has contracted notably so far this year, declining from 171.50 million in December 2025 to 170.08 million in May. The labor force participation rate remained at 61.8% in May, continuing to be the lowest level since October 2021. This suggests that a meaningful share of potential workers has moved to the sidelines, posing an ongoing challenge for employers. Even as overall labor market conditions show signs of cooling, many businesses, including restaurants, will continue to struggle to find and retain talent.
The unemployment rate remained at 4.3% for the third straight month, which has been the average since June 2025. Yet, the number of unemployed individuals was somewhat lower, down from 7.37 million in April to 7.31 million in May.
At the same time, average hourly earnings for private‑sector production and nonsupervisory workers rose 0.2% to $32.31 in May, up 3.6% from a year earlier. This suggests a still-solid rate of wage growth in the U.S. economy, even as labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in May was largely positive but mixed. The increase in employment was led by growth in leisure and hospitality (including restaurants), local government, private education and health services, and construction. Below is a detailed breakdown of May’s employment changes by sector, ranked from highest to lowest:
Sustained gains in employment and wages remain critical support for consumer spending, and any deterioration could weigh on overall activity. Restaurant operators are closely tracking these trends as they navigate softer-than-desired demand; continued labor market strength should help support spending and traffic in the months ahead.
However, downside risks persist, including higher energy costs, ongoing inflationary pressures, and geopolitical uncertainty. Moreover, firm job growth, especially alongside elevated prices, complicates the Federal Reserve’s path, making interest rate cuts less likely this year and potentially raising the risk of further tightening. For now, the Federal Open Market Committee is expected to keep rates unchanged for the foreseeable future, with rate hikes or cuts both unlikely in the near term.
At the same time, the civilian labor force has contracted notably so far this year, declining from 171.50 million in December 2025 to 170.08 million in May. The labor force participation rate remained at 61.8% in May, continuing to be the lowest level since October 2021. This suggests that a meaningful share of potential workers has moved to the sidelines, posing an ongoing challenge for employers. Even as overall labor market conditions show signs of cooling, many businesses, including restaurants, will continue to struggle to find and retain talent.
The unemployment rate remained at 4.3% for the third straight month, which has been the average since June 2025. Yet, the number of unemployed individuals was somewhat lower, down from 7.37 million in April to 7.31 million in May.
At the same time, average hourly earnings for private‑sector production and nonsupervisory workers rose 0.2% to $32.31 in May, up 3.6% from a year earlier. This suggests a still-solid rate of wage growth in the U.S. economy, even as labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in May was largely positive but mixed. The increase in employment was led by growth in leisure and hospitality (including restaurants), local government, private education and health services, and construction. Below is a detailed breakdown of May’s employment changes by sector, ranked from highest to lowest:
- Leisure and hospitality: +70,000 (eating and drinking places: +48,000)
- Local government: +55,000
- Private education and health services: +40,000
- Construction: +17,000
- Professional and business services: +6,000
- Mining and logging: +4,000
- Other services: +3,000
- Federal government: +1,000
- Information: -2,000
- Trade, transportation, and utilities: -3,000 (retail trade: -1,100)
- State government: -4,000
- Financial activities: -22,000