US adds 172,000 jobs in May, unemployment holds at 4.3% despite inflation pressures

US employers added 172,000 jobs in May, showing continued strength in the labour market despite rising costs linked to the Iran war. The US Labour Department said on Friday (June 5) that hiring was slightly lower than April’s revised figure of 179,000 jobs. The unemployment rate remained unchanged at 4.3%.

The job market has been gradually recovering this year after a weak 2025, and has so far held steady despite higher energy prices and increased uncertainty following the United States and Israel’s attacks on Iran in late February.

Hiring has bounced back this year from a miserable 2025, showing unexpected strength in the face of economic uncertainty and painfully high energy prices caused by the Iran war.

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Unemployment remained at a low 4.3% in May. But despite the improvement from last year, job creation is way down from the boom that followed pandemic lockdowns.

Many young people are finding it tough to break into a stagnant job market. And workers who have been laid off struggle to get back to work. More than a quarter of the unemployed in April had been jobless for more than six months, up from less than 20% two years ago.

Seeing their prospects diminished, Americans are reluctant to leave their jobs and seek something better elsewhere. In April, the number of people who quit dropped to the lowest level since the frightening days of August 2020, when COVID-19 was running rampant. Last year, employers added 9,700 jobs a month, the fewest outside a recession since 2002.

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This year, hiring has rebounded, averaging 76,000 new jobs a month from January through April. Big tax refunds — the product of President Donald Trump’s 2025 tax cuts — have given the economy a lift, offsetting the impact of higher energy prices since the United States and Israel attacked Iran in late February. But the refunds have mostly been pocketed, and gasoline prices remain above $4 per gallon.

Healthcare companies have been propping up the job market. Over the past year, they’ve added more than 456,000 jobs; all other US employers have collectively cut 205,000.