U.S. labor market adds jobs as hiring challenges persist

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U.S. labor market job growth

Highlights

The U.S. added 172,000 jobs in May, nearly double expectations, with revisions bringing March and April to 214,000 and 179,000 respectively.
Leisure and hospitality led sector gains in May, with job openings hitting their highest rate since 2024, according to the April JOLTS report.
Inflation rose above 4% in May while wage growth lagged, intensifying household pressure as the hiring rate slipped to 3.2% and long-term unemployment reached 27.5%.

May jobs data points to broader growth

As reported by Business Insider, the June 5 monthly jobs report shows the U.S. added 172,000 jobs in May, about double expectations, while March and April figures were revised higher to 214,000 and 179,000 respectively. That leaves the three-month average at its highest level since March 2024 and suggests the labor market is regaining momentum after a largely stagnant period last year.

Job gains are no longer coming only from healthcare. Leisure and hospitality posts the largest net increase in May, likely helped in part by World Cup demand, followed by government and healthcare, while the April JOLTS report from the Bureau of Labor Statistics shows job openings rising to the highest rate since 2024, led by professional and business services.

Private-sector indicators also point to resilience. Gusto says small businesses across most sectors added jobs last month in all U.S. regions, and ADP reports solid private payroll gains across company sizes and in most industries heading into the summer.

Low hiring and inflation keep pressure on workers

The stronger pace of job creation does not remove the strain facing many households or job seekers. Economists cited in the report say hiring remains subdued in several sectors, especially white-collar fields, even as layoffs stay relatively low by historical standards.

The financial activities sector loses 22,000 jobs in May, and the information sector, which includes media and technology, continues to record mostly monthly declines over the past few years. Bureau of Labor Statistics data also show the hiring rate slips to 3.2% in April, while the quits rate remains at 1.9%, indicating workers are less confident about their chances of finding new roles.

Long-term unemployment is also elevated. Of the 7 million unemployed people in the U.S., 27.5% have been out of work for at least 27 weeks in May, a level that economists say is high for an economy still generating healthy payroll growth.

Pay growth is adding to the pressure because it is no longer keeping up with inflation. Inflation rises above 4% in May for the first time since 2023, increasing the squeeze on household budgets as essential costs such as food and gas remain difficult to cut.

Our earlier article on the World Cup’s commercialization in North America explained how the tournament is being packaged around sponsorship, hospitality, betting, and media rights, with FIFA projecting $8.9bn in revenue. We also noted that U.S. investor influence is increasingly shaping football’s business model through tactics like dynamic ticket pricing and expanded matchday advertising inventory.

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