May’s jobs report showed a labor market that is improving, with payroll growth exceeding expectations and layoffs down sharply from last year. Steady hiring and fewer layoffs should continue to support consumer spending and U.S. economic growth.
Last week’s jobs report showed that the U.S. labor market remains more resilient than expected. Nonfarm payrolls rose by 172,000 in May, well above consensus expectations for 88,000. Upward revisions to the prior two months also suggest hiring momentum has been firmer than initially reported, reinforcing the view that labor demand has held up despite ongoing geopolitical uncertainty.
So far, the labor market is better than last year. Year-to-date payroll gains total 569,000, compared with 182,000 over the same period in 2025. Layoffs have also moved in a more constructive direction. Year-to-date layoffs stand at 398,000, down sharply from 696,000 at this point last year.
Looking ahead, job growth is likely to settle into a more moderate range due to aging demographics and lower immigration. Still, as long as hiring continues and layoffs remain contained, consumer spending, the backbone of the U.S. economy, should remain positive.
