US added 172,000 jobs in May as labor market shows signs of resilience

Government figures show unemployment rate at 4.3% amid rising inflation and economic uncertainty from Iran war

US employers added 172,000 jobs in May while the country’s unemployment rate held steady at 4.3%, a sign of a resilient labor market despite rising inflation and economic uncertainty brought on by continued conflict in the Middle East.

Economists initially predicted there would be about 80,000 new jobs and a steady unemployment rate of 4.3%. Job figures for March and April were also revised up 29,000 and 64,000, respectively, a 93,000 boost compared with initial figures.

Job growth was seen in leisure and hospitality, which was boosted by 70,000 jobs in May, including 48,000 jobs in food services and drinking places. Employment in local government and healthcare also rose last month.

A strong labor market puts the Federal Reserve chair, Kevin Warsh, in a bind as the central bank combats enormous pressure from the White House to lower interest rates at its next meeting in mid-June.

The Fed typically cuts rates in response to a weak labor market, boosting the economy at the risk of raising prices. With both new jobs and prices going up, the case for cutting interest rates will be harder for Warsh to make.

The new data from the Bureau of Labor Statistics is the latest in a number of reports that have pointed to strong hiring in recent months, despite a strained economy and an increase in inflation.

The labor department announced earlier this week that the number of job openings in April increased to 7.6m, while the number of people quitting, laid off and discharged changed little.