With Wall Street expecting a strong - not great - number, and a modest decline from April's 115K, moments ago the BLS reported a shocker: in May the US added 172K jobs...

... not only a 4-sigma beat to the median estimate of 88K, but also above the highest estimate of 125K.

The change in total nonfarm payroll employment for March was revised up by 29,000, from  +185,000 to +214,000, and the change for April was revised up by 64,000, from +115,000 to +179,000. With these revisions, employment in March and April combined is 93,000 higher than previously reported.

Turning to the Household survey, unlike previous months, we saw the number of employed people rise from 162.622K to 162.771K, a 149K increase.

The unemployment rate held at 4.3%, in line with expectations. Among the major worker groups, the unemployment rates showed little or no change in May for adult men (4.0%), adult women (3.8%), teenagers (14.7% ), and people who are White (3.8%), Black (6.6%), Asian (3.8%), or Hispanic (5.0%).

The labor force participation rate held at 61.8% in May, and the employment-population ratio changed little at 59.2 percent. These measures showed little change over the year, after accounting for annual population control adjustments. 

Average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents or 0.3%, in line with estimates. Over the year, average hourly earnings have increased by  3.4%, also in line with estimates. In May, average hourly earnings of private-sector production and nonsupervisory  employees rose by 8 cents, or 0.2 percent, to $32.31

Some more details from the report:

• The number of people jobless less than 5 weeks declined by 286,000 to 2.2 million in May, largely offsetting an increase in the prior month. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed over the month at 2.0 million but is up by  524,000 over the year. The long-term unemployed accounted for 27.5 percent of all unemployed people in May. 
• The number of people employed part time for economic reasons, at 4.8 million, changed little in May. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• In May, the number of people not in the labor force who currently want a job changed little at 6.2 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.7 million in May. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 486,000 in May, essentially unchanged from the previous month. 

Taking a closer look at the Establishment survey, job gains occurred in leisure and hospitality, local government, and health care. Employment in financial activities declined. 

• Leisure and hospitality added 70,000 jobs in May, well above the average monthly gain of 14,000 over the prior 12 months. Over the month, food services and drinking places added 48,000 jobs.
• In May, employment in local government rose by 55,000, largely reflecting a gain in local government, excluding education (+44,000).
• Health care added 35,000 jobs in May, in line with the average monthly gain of 38,000 over the prior 12 months. Over the month, ambulatory health care services added 26,000 jobs, including a gain of 11,000 in home health care services. Employment continued to trend up in hospitals (+6,000).
• Social assistance employment continued to trend up in May (+12,000), mostly in individual and family services (+10,000). Over the prior 12 months, social assistance had added an average of 17,000 jobs per month. 
• Employment in mining, quarrying, and oil and gas extraction increased by 5,000 in May and is up by 10,000 since February.
• Financial activities employment declined by 22,000 in May and is down by 107,000 since a  recent peak in May 2025. Over the month, job losses occurred in insurance carriers and related activities (-11,000) and commercial banking (-3,000).
• Employment in transportation and warehousing was essentially unchanged in May (+1,000) but is down by 92,000 since reaching a peak in February 2025. Over the month, transit and ground  passenger transportation (+9,000) and warehousing and storage (+6,000) added jobs. Air  transportation lost 9,000 jobs, largely reflecting a business closure.
• Employment showed little change over the month in other major industries, including  construction, manufacturing, wholesale trade, retail trade, information, professional and  business services, and other services.

And visually:

One notable thing about the composition was the unexpected surge in Local Government jobs, which surged by 55K, the biggest jump since March 2024. It is unclear what prompted this. 

in kneejerk reaction, today's very hot print immediately pushed rate hike odds higher, with traders now fully pricing in a quarter point rate hike by year-end. According to Adam Crisafulli, "This jobs report will make life even harder for Warsh as his preferred dovish policy pathway is even more difficult to justify."

As for the market, it is unclear how traders read this. As a reminder, JPM said that any number above 130k, could lead to SPX loses 1% to gains 50bp, depending on the internals. And now the narrative begins to nudge said internals in a bullish direction.