The US economy added 172,000 nonfarm payroll jobs in May, roughly double what economists had penciled in. Wall Street was expecting something closer to 80,000 to 85,000. Instead, the Bureau of Labor Statistics delivered a number that, on the surface, looks like a labor market running hot.
Look closer, though, and the story gets more nuanced. The unemployment rate held steady at 4.3%, long-term unemployment is climbing, and Bitcoin slid toward $62,000 as traders recalibrated their bets on when the Federal Reserve might finally cut rates.
A tale of two labor markets
The topline number is genuinely strong, and it gets even better when you factor in that previous months were revised upward by a combined 93,000 jobs.
The gains were heavily concentrated in leisure and hospitality, think restaurants, hotels, and the kinds of service-sector roles that were decimated during the pandemic and have been slowly clawing back ever since. This isn’t broad-based hiring across the economy. It’s one sector doing the heavy lifting while others sit on the bench.