The U.S. labor market continues to show strength despite economic challenges, with a May payroll increase of 172,000 jobs. The report, which also revised previous months’ employment figures upward by an additional 93,000, is seen as a positive indicator ahead of upcoming midterm elections. Key sectors driving this growth include leisure, hospitality, and health care. The unemployment rate remains stable at 4.3%. Economic indicators suggest a resurgence in the manufacturing sector, though inflation concerns persist, with inflation levels above the Federal Reserve's target. Consumer sentiment, however, is notably low, as two-thirds of Americans disapprove of President Trump's performance.

'ON FIRE': Blowout jobs report shows Trump's economy has held up under Iran pressures

The news follows a string of economic releases earlier this week that suggest the U.S. manufacturing sector has started to rebound, even as gas and energy prices surge.

Donald Trump shakes hands with Kevin Warsh.

President Donald Trump shakes hands with Kevin Warsh as they arrive to Warsh's swearing-in ceremony to be the new Chairman of the Federal Reserve in the East Room of the White House on May 22, 2026, in Washington, D.C. | Anna Moneymaker/Getty Images

By Sam Sutton06/05/2026 09:45 AM EDT

Voters think President Donald Trump’s economy is the pits. The labor market is telling a very different story.

The Labor Department on Friday reported that U.S. payrolls grew by 172,000 in May, a sign of strong economic momentum ahead of a midterm election campaign season that’s certain to be dominated by questions about affordability and the cost of living. The department’s Bureau of Labor Statistics also upwardly revised its estimates for payroll growth in March and April, tacking another 93,000 positions onto blockbuster tallies that had been reported earlier this spring.

The closely watched report represents a clear sign that the economy remains on solid footing despite turmoil around the war with Iran. The employment surge was heavily concentrated in leisure and hospitality — which often climbs in the summer — as well as the health care sector, which has been a major driver of payroll growth since the pandemic. The jobless rate remained unchanged at 4.3 percent.

The report follows a string of economic releases earlier this week that suggest the U.S. manufacturing sector has started to rebound, even as gas and energy prices surge due to dwindling global inventories of oil and gas. BLS also reported on Tuesday that the number of job openings had ballooned in April.

The White House trumpeted the “OUTSTANDING JOBS NUMBERS!” in a post on X shortly after the report’s release. And the Labor Department framed the blowout tally as a sign that Trump’s “economy is ON FIRE!”

“Despite everything going on in the world around us, America’s employers are regaining their confidence,” Guy Berger, a labor market specialist and the chief economist at Homebase, wrote on Friday morning. “And that confidence is leading to the rising turnover we see in our data.”

But while the labor market may be humming, inflation worries have crept back to the fore. Even setting aside the volatile spikes in food and energy prices, the Federal Reserve’s preferred inflation gauge now stands at 3.3 percent — well above its annual 2 percent target. If there were any expectations that newly confirmed Fed Chair Kevin Warsh could quickly bring down interest rates — a major priority for Trump, and the root of his fury at former Chair Jerome Powell — the employment surge should put those on hold.

The jobs report “reduces any urgency for the Fed to act on the employment side of its mandate,” Jason Pride, chief of investment strategy and research at Glenmede, said in a note on Friday morning — a reference to the central bank’s charge to maximize employment. “Investors should expect the Fed to hold at its next meeting and focus attention on whether post-ceasefire energy relief begins to pull headline inflation lower.”

Measures of economic growth have also signaled a slowdown, and many economists expect high prices at the pump to eat away at consumer spending in the months ahead. Consumer sentiment is at a record low, according to a closely watched University of Michigan survey, and nearly two-thirds of Americans disapprove of the president’s performance, according to CNN’s polling tracker.

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