May Nonfarm Payrolls

Updated: 05-Jun-26 09:19 ET

Highlights

• Nonfarm payrolls surged by 172,000, aided by a 52,000 increase in government jobs; the unemployment rate held steady at 4.3%, along with the labor force participation rate (61.8%), and average hourly earnings increased 0.3% month-over-month.

Key Factors

• May nonfarm payrolls increased by 172,000 ( consensus: 96,000). The 3-month average for total nonfarm payrolls increased to 188,000 from 79,000. April nonfarm payrolls revised to 179,000 from 115,000. March nonfarm payrolls revised to 214,000 from 185,000.
• May private sector payrolls increased by 120,000 ( consensus: 89,000). April private sector payrolls revised to 177,000 from 123,000. March private sector payrolls revised to 202,000 from 190,000.
• May unemployment rate was 4.3% ( consensus: 4.3%) versus 4.3% in April. Persons unemployed for 27 weeks or more accounted for 27.5% of the unemployed versus 25.3% in April. The U6 unemployment rate, which accounts for unemployed and underemployed workers, decreased to 8.1% from 8.2% in April.
• May average hourly earnings were up 0.3% ( consensus: 0.3%) on the heels of a 0.2% increase in April. Over the last 12 months, average hourly earnings have risen 3.4% versus 3.6% for the 12 months ending in April.
• The average workweek in May was 34.3 hours ( consensus: 34.3) versus 34.3 hours in April. The manufacturing workweek was unchanged at 40.4 hours. Factory overtime edged up to 3.1 hours.
• The labor force participation rate held steady at 61.8%.
• The employment-population ratio increased to 59.2% from 59.1% in April.

Big Picture

• The key takeaway from the report is that it is manna for headline writers but still lacks some important sustenance to suggest it is a marker of an economy running on a full stomach. To wit: real average hourly earnings on a year-over-year basis are down 0.4%; there were job losses in the retail trade (-1,100), information (-2,000), and financial (-22,000) industries; and the percentage of unemployed workers for 27 weeks or more increased to 27.5% from 25.3%, which we will assume speaks to the difficulty of finding a new job with comparable compensation to the prior one.