The U.S. labor market continued to show resilience in May despite ongoing economic uncertainty and inflationary pressures. According to the U.S. Bureau of Labor Statistics’ Employment Situation May 2026 report, nonfarm payrolls increased by 172,000, significantly exceeding economists’ expectations, while gains for March and April were revised upward by a combined 93,000 jobs. The unemployment rate remained unchanged at 4.3%.

Job growth occurred across multiple sectors, a departure from recent months when gains were concentrated primarily in healthcare. Leisure and hospitality led hiring gains, followed by local government, healthcare, and social assistance. Small businesses continued to lead job growth according to the ADP National Employment Report.

While overall hiring conditions have improved compared to earlier in the year, challenges remain. Recent graduates continue to face a more difficult job market than in previous years, with unemployment rates for new entrants remaining elevated relative to the broader workforce. As organizations increasingly adopt AI, many of the activities traditionally assigned to entry-level employees are increasingly being automated, significantly reducing job opportunities.  

In addition, wage growth has not kept pace with inflation. Average hourly earnings increased 3.4% over the past year, compared to inflation of 3.8%, reducing purchasing power for many workers despite continued job growth.

The strength of May hiring reinforces what we experience in our work: many organizations continue to invest in talent despite ongoing economic uncertainty when hiring supports critical business priorities and growth initiatives. The current labor market also continues to reward experience and specialized expertise, particularly as organizations focus on skills that can drive immediate business impact.