The Bureau of Labor Statistics (BLS) recently published its May jobs report, highlighting job growth in hospitality, government, and healthcare, alongside losses in other sectors.
In May, the U.S. economy added 172,000 jobs. This follows a revised April gain of 179,000. Analysts had predicted an 85,000-job increase, so the report exceeded expectations for the third month in a row. Despite the job increases, the unemployment rate remained at 4.3%.
The Trump administration faces economic challenges, including geopolitical tensions with Iran and changing domestic policies. Although hiring trends are positive, concerns about inflation persist. This situation is likely to prevent the Federal Reserve from reducing interest rates soon.
Where Jobs Are Growing
The leisure and hospitality sector led job growth, adding 70,000 positions. Restaurants and bars contributed nearly 50,000 of these jobs. The public sector also saw a rise, with government payrolls increasing by 55,000 jobs due to local government hiring outside education. Healthcare maintained steady growth, with 35,000 jobs added, driven by ambulatory services and hospitals. Social assistance employment grew by 12,000 positions, responding to the demand for individual and family services.
This data reflects a trend in post-pandemic labor markets: job growth is focused on service industries linked to consumer demand and demographics.
“The favorable top-side employment gain of 172,000 was largely driven by lower-paying industries such as local government (non-education) and restaurants with perennial jobs, leader healthcare continuing its strong gains. If you’re hoping for better-paying industries to add to payrolls, you got some mild relief in several IT industries but most white-collar sectors were neutral, or in the case of banking and insurance, down over 20K,” Ron Hetrick, principal economist at Lightcast, told Newsweek.
Hetrick noted a labor force increase of 83,000, with 82% being Hispanics, primarily Hispanic men.
Industries Losing Jobs
The financial sector saw the most significant decline in May. Employment in financial activities dropped by 22,000 jobs, contributing to a broader trend of over 100,000 positions lost since May 2025. These losses mainly involve insurance carriers and commercial banks. Transportation and warehousing remained stable but below their 2025 peak. While ground transportation and warehousing made modest gains, air transportation saw job losses due to a business closure.
Construction, manufacturing, retail trade, and professional and business services showed little change, indicating cautious hiring.
“One thing that is clear, unemployment in manufacturing has been heading down, approaching historical lows. This may be in part due to the removal of asylum seekers, many of whom found work in manufacturing, construction, and hospitality,” Hetrick said. “It may also be driven by companies attempting to reshore after tariffs and taking what is left from a shallow labor pool. The market does not look capable of meeting many more needs in that sector.”
U.S. Economic Outlook
The recent jobs report suggests a steady labor market, yet with notable differences beneath the surface. Job growth in services like leisure, healthcare, and local government offsets weaknesses in finance, while other industries show limited movement. Policymakers and economists now face the challenge of determining whether job growth will expand across the economy or stay concentrated in certain sectors.