The job market is much stronger than economists expected. Why?

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June 5, 2026 / 4:35 PM EDT

/ MoneyWatch

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Against all odds, the U.S. job market is in a good place. Employers added 172,000 jobs in May, blowing past analyst forecasts and sustaining the healthy pace of payroll gains from the two prior months. Average monthly job growth from March through May has tripled from roughly 63,000 a year ago to nearly 190,000 this spring.The economy has faced one headwind after another over the past year, including the highest tariffs in more than 70 years; the Iran war; a recurrence of the inflationary pressures that slammed Americans during the pandemic; and persistent public pessimism, or "vibecession," as millions struggle with the cost of living.Despite these challenges, the labor market is showing surprising strength after weakening toward the end of 2025 and into early 2026. Several forces account for the recent burst in job growth, according to economists. Strong corporate profits are "a huge part of the equation," eToro U.S. investment analyst Bret Kenwell told CBS News. "That's what gives them the leeway to hire."U.S. corporations boosted their earnings growth in the first quarter by about 28%, while 85% of S&P 500 companies posted quarterly profits that exceeded analysts' expectations — the highest share in almost five years, according to a FactSet analysis. Corporate earnings growth over the last two years has averaged a healthy 11%. Analysts now expect second-quarter profit growth of about 22%, the financial data firm said.