The labor market delivered another whopping win on Friday: 172,000 jobs in May, when economists had expected 88,000.
The even stronger surprise was in the rearview mirror: March was revised up by 29,000 to 214,000, and April by 64,000 to 179,000. Combined, the two months were 93,000 stronger than previously reported.
Though such a strong labor market is good news for those fearing the economy was stalling—or that AI was eating jobs—it could make investors wince. The strong print likely kills off what has been left of rate-cut hopes for this year, especially as inflation persists and the conflict in Iran drags on. The 10-year bond yield jumped about 6 basis points to above 4.5%.
Unemployment held at 4.3%, however, largely unchanged since last July, so the report’s other wildcard is defused.
The job market is rebounding in 2026 after a limpish 2025. After all the revisions were said and done, the economy added roughly 10,000 jobs a month in 2025. So far in 2026, it’s averaging 114,000.
