May nonfarm payrolls are expected to rise 85,000 with unemployment holding at 4.3%, a result that would extend this year’s firmer hiring trend after average monthly gains of 76,000 in January-April.
April JOLTS data and May ADP figures underpin that view: job openings reached a two-year high, vacancies topped unemployed workers for the first time since last June, and ADP reported 122,000 private-sector jobs added.
The improvement looks stronger against a much lower labor-market breakeven rate—now near zero, according to a Fed paper—meaning even modest payroll gains can keep unemployment from rising.
Wage pressure remains subdued, with annual earnings growth trending lower and real pay negative as inflation nears 4%, giving the Fed more room because labor strength is not yet feeding inflation.
Risks still cloud the outlook, including a global energy shock, AI uncertainty and 97,000 announced May job cuts—the highest for that month since 2020—even as economists say cyclical employment likely bottomed last year.
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May 2026 Jobs Report: Robust Growth, Rising Inflation, and the Looming Impact of AI on U.S. Employment
Overview
The May 2026 jobs report shows the U.S. economy added jobs for the third month in a row, with the unemployment rate steady at 4.3% and the labor force participation rate unchanged at 61.8%. The number of employed people increased by 149,000, and broader unemployment measures improved slightly. Upward revisions to previous months’ job figures add to the positive headline numbers. However, the report also highlights that job growth is not broad-based, with hiring mostly focused on select sectors and employers remaining cautious. This mixed picture suggests underlying weaknesses despite the strong surface data.