The U.S. employment report for May delivered results far exceeding market expectations: there was a net increase of 172,000 non-agricultural jobs, more than twice the economist predictions. Data from the previous two months was also significantly revised upwards. However, behind these impressive figures, the situation in the U.S. job market is not optimistic: the number of long-term unemployed people with unemployment benefits for 27 weeks or more reached nearly 2 million in May, accounting for 27.5% of all unemployed people. This is the highest level since the end of 2021. Several institutions warn that the U.S. job market is exhibiting characteristics of "superficial strength and internal stagnation," with more and more unemployed people being left waiting in long-term job-seeking situations.
According to Reuters, data from the U.S. Bureau of Labor Statistics shows that the number of non-agricultural jobs increased by 172,000 in May. After adjusting the data for April, the new employment increase was 179,000. Previously, economists surveyed by Reuters predicted that the new employment growth in May would be only 85,000, while the initially reported new employment data for April was 115,000.
In May, employment growth was mainly concentrated in the leisure and hospitality industries, local government sectors, and healthcare industries. Employment in the financial sector decreased. Specifically, the leisure and hospitality industry added 70,000 new jobs in May, a significant increase from the average of 14,000 new jobs per month over the past 12 months. Among these new jobs, 48,000 were in the restaurant service and drinking establishments sectors.
The market’s forecast for the employment growth in May is between 50,000 and 125,000 people. In March, non-agricultural employment data was revised upward by 29,000 people, resulting in a final increase of 214,000 people. Over the past three months, the United States has seen an average monthly increase of 188,000 people in employment, nearly twice the level of the same period in 2025.
The performance of the job market significantly boosted expectations for interest rate hikes this year, causing severe turmoil in the financial market. The US dollar and U.S. bond yields rose accordingly, while U.S. stock prices fell sharply under pressure.
April 15th, in Ivanovo, Russia, young people attended a one-day job fair called “Work in Ivanovo” at the Sports Palace. IC Photo
After the data was released, the US dollar index against six major currencies rose by 0.65% on the same day, closing at 100.068 at the end of the trading session. The yield on 10-year US government bonds increased by nearly 6 basis points to 4.53%.
On May 5th, the US stock market experienced a 'Black Friday' day, with all three major stock indices falling significantly due to rising expectations of interest rate hikes. Among them, the Nasdaq Composite Index dropped by more than 1100 points.
Cleveland Federal Reserve Bank President Beth McArdy said: "It is reasonable to keep interest rates unchanged for now, but if the current trend continues, the Fed may soon need to take action to address high inflation."
Meanwhile, multiple institutions have pointed out that bright non-agricultural data obscured the pressure accumulating within the US labor market.
According to a latest analysis by Hiring Lab, part of the recruitment platform Indeed, the US job market currently exhibits characteristics of a ‘surfacely strong, internally stagnant’ situation. The stable unemployment rate is more a reflection of companies’ reluctance to lay off employees, rather than a significant increase in hiring demand.
The May employment report actually presents “two realities”: On the one hand, there were 172,000 new jobs created in the United States in May, far exceeding market expectations. The unemployment rate remained at 4.3%. On the other hand, recruitment activities and employee turnover rates are still low, indicating that the job market is still in a state of “low hiring, low layoffs”.
Analysis suggests that the current scale of layoffs is relatively small, resulting in stable unemployment rates. This is undoubtedly good news for workers who already have jobs. However, companies are also lacking the willingness to expand hiring, making it more difficult for job seekers to re-enter the labor market. Many employees who might have switched jobs in search of better opportunities have chosen to stay in their current positions due to a decrease in external opportunities.
This contradiction is particularly evident among those who have been unemployed for a long time.
The report also shows that the number of long-term unemployed Americans, those who have been unemployed for 27 weeks or more, has increased by 155,000 people, bringing the total to 1.988 million. This is the highest level since December 2021. This group of unemployed individuals accounts for 27.5% of all unemployed people, which is higher than the 20.4% in the same period last year and significantly higher than pre-pandemic levels. The median duration of unemployment increased from 11 weeks in April to 11.6 weeks, setting a new high since November 2021, indicating that it is becoming more difficult for unemployed people to find new jobs.
Some views suggest that for unemployed individuals, the comfort brought by a low rate of layoffs is limited, as a low employment rate means they will need more time to find new jobs.
The Hiring Lab warns that the current US job market is actually in a fragile balance. As long as economic demand remains stable, a pattern of "low hiring, low layoffs" can continue. However, if economic growth slows down or corporate demand weakens, due to limited recruitment capacity, the job market will lack a buffer to absorb unemployed people, and unemployment rates could rise rapidly. Although this situation has persisted for a long time, it does not mean that it can last indefinitely. Its future trajectory deserves continuous attention.
The proportion of industries that achieved employment growth in May increased from 54.0% in April to 54.4%, reaching a six-month high. The average weekly working hours remained at 34.3 hours. Annual salary growth decreased from 3.6% in April to 3.4%. Although salary increases are not the main driver of inflation in the near term, rising living costs continue to weaken consumers' purchasing power, potentially suppressing consumption.
After adjusting for inflation, disposable income of American residents has been declining for three consecutive months. To maintain their daily spending, people are constantly using their savings, resulting in a current savings rate that has reached its lowest level in four years.
Analysis suggests that last year, the Trump administration implemented comprehensive tariff policies, which increased market uncertainty. As a result, businesses had low willingness to hire new employees, and the job market was thus impacted adversely. The current improvement in employment is also largely due to the low level of layoffs seen in recent times.
In February this year, the U.S. Supreme Court ruled that certain tariff policies were invalid, and some companies have already applied for tax refunds. Large tax refunds support consumer spending, but the majority of consumers are from high-income families.
