Labor market adds 172,000 jobs in May, but growth remains uneven

May marked another month this year when the labor market was stronger-than-expected, the latest jobs report from the Bureau of Labor Statistics revealed.

Job gains were well above expectations, with some industries reporting stronger growth than healthcare—the backbone of US job growth in recent years—while the unemployment rate stayed the same. That said, the majority of industries are still experiencing sluggishness, and a rethinking of talent acquisition and retention strategy may be due, experts told HR Brew.

Diving into the data. Employers added 172,000 jobs in May, a much stronger showing than the 80,000 jobs expected by analysts polled by the Wall Street Journal ahead of the data’s release (final revised numbers will be available at a later date). Job gains in March and April were revised upward, from 185,000 to 214,000 job gains in the former, and 115,000 to 179,000 in the latter. The unemployment rate remained steady at 4.3%, and has hovered between that and 4.5% since July 2025.

By industry, leisure and hospitality led job growth in May, adding 70,000 jobs primarily concentrated in food services and drinking places, which increased by 48,000. Local government employment followed, adding 55,000 jobs. Healthcare added 35,000 jobs in May, slightly below its average monthly gains of 38,000 over the past year, and around 11,000 of which were in home health care services. Similarly, social assistance added 12,000 jobs last month, primarily in individual and family services.

Last month’s payroll growth mirrored that seen in 2023 and 2024, when multiple industries experienced meaningful gains, rather than that of the last year, when healthcare was the only sector reporting such activity, Kory Kantenga, head of economics for the Americas at LinkedIn, wrote on the platform.

“The strength of the report points to a labor market still on solid footing,” he wrote. However, while Friday’s job gains—preceded by a significant uptick in job openings in April’s JOLTS data—may suggest that the labor market is heating back up, Kantenga warned that such assumptions are too hasty given that growth is only concentrated in a few industries and wage growth remains weak. (Average hourly wages rose to $37.53 in May, up 3.4% year over year, while wage growth between May 2024 and 2025 was 3.9%.) “Without broader hiring strength or faster pay growth, the case for a true reacceleration remains weak,” he added.

For many industries that did see wage growth last month, some—like healthcare and social assistance, and leisure and hospitality—heavily rely on person-to-person interactions, Michael Rosenbaum, founder and CEO of Arena Analytics, a firm that uses predictive workforce analytics to help match candidates to roles in which they’re statistically likely to succeed, told HR Brew. As AI augments or replaces certain tasks performed by humans, those that remain require interpersonal skills, which may point to increased growth in these sectors.

“The ability to build trust with another human being, which a computer can’t do, I think is a really important dynamic to watch in these reports, and we are watching it very closely,” he said. Meanwhile, occupations like back office insurance jobs are in decline (employment in insurance carriers fell by 10,700 in May). “Those are jobs which frequently don’t need that skill as much,” Rosenbaum noted.

Zoom out. Despite growth in certain sectors, job growth remains stable, if not stagnant, in most industries. Many employers, including those in light industrial manufacturing, are currently being selective when hiring, wanting to ensure that the talent they hire have the right skills, Sara Breiner, area VP at Adecco, said.

“It’s really about finding the right candidates to fill those roles, given some of the skills gaps that we’re seeing,” she said.

But, with talent shortages making it more difficult for companies to buy the skills needed off the market, she says clients have turned to alternative methods to meet those demands, either with current employees or new hires with growth potential. That includes re-hiring retirees to help mentor and train younger workers, and partnering with schools to develop apprenticeship programs that better prepare students for future jobs.

Talent acquisition leaders should also focus on adopting processes or tools that allow them to attract and evaluate talent that previously might not have been considered for a role, Rosenbaum said. That could be something like using agentic technology—which is trained to match or recommend non-traditional talent—to conduct initial interviews, he said.

“This friction is a major constraint on the macro economy. And so I think that technology is one of a series of tools that makes it possible for HR and talent acquisition leaders to do that today in a way they couldn’t not that long ago,” he said, adding, “Making sure that you have that in place is going to be increasingly important.”