The labor market remains in good standing, beating out economist expectations for another month in May as the rest of the economy continues to waiver under the pressure of geopolitical uncertainty.
The latest Employment Situation Summary from the Bureau of Labor Statistics saw the U.S. add 172,000 jobs in May, “well above forecasts ranging from 85,000 to 110,000,” as noted by Realtor.com® Senior Economist Jake Krimmel. Gains were focused in job leisure and hospitality, local government and healthcare.
This follows a strong performance in April—originally reported as a gain of 115,000 jobs, but now upwardly revised to 179,000. April’s report also beat out economist expectations. March’s jobs numbers were also upwardly revised, originally at a gain of 178,000 but now shifted to 214,000.
The unemployment rate also remained unchanged at 4.3% for the third consecutive month.
Notably, the National Association of Realtors®’ Chief Economist Lawrence Yun said that the “upward revisions to the prior months’ data show cumulative job gains of 565,000 over a three-month period—among the strongest in recent years.”
Krimmel added that “we remain in a low-hire, low-fire labor market, but one that looks increasingly stable.”
After the minutes from the Federal Reserve’s latest meeting came out detailing a potential plan to raise interest rates if inflation continues to rise, eyes are on Fed indicators like the jobs report in hopes of bettering signs.
Krimmel noted that another strong jobs report this month is “good news” as it “means one fewer fire to put out.”
“Labor stability, and upside surprise job growth like today, is a much-needed counterweight to the price instability and upside risk that has dominated the macro outlook since the Iran War began,” he added.
However, despite the improving labor market, Krimmel said “the next move on Fed rates is more likely up than down” as other indicators remain troubled.
“In that environment, labor market movements are unlikely to be the main driver for changes in mortgage rates,” he continued. “The 10-year yield and mortgage rates will continue to be more sensitive to geopolitics, inflation expectations and war-driven uncertainty than to job growth and unemployment statistics right now.”
As for the housing market directly, Yun noted that with a “record-high number of job-holders” there should be a “record-high number of home sales,” but unfortunately housing affordability challenges and inflation continue to hold back a boom in activity.
Krimmel added that the housing market this spring has been “resilient,” with better conditions than in 2025. However, he noted that economic headwinds—namely high mortgage rates and rising inflation—are “substantial.”
“For the housing market to keep treading water, we need the labor market to hold or, ideally, to show signs of a real summer pickup,” Krimmel concluded.
