The U.S. adds 172,000 jobs. Many are in restaurants, bars and hotels

The U.S. economy showed solid growth in May, with employers adding a total of 172,000 new jobs. This marks the third consecutive month of job gains, indicating that the labor market is stabilizing. The Labor Department also reported that job gains for March and April were higher than first thought. A significant portion of this growth came from the service sector, particularly in anticipation of strong summer demand.

Restaurants and bars accounted for 48,000 new positions, and the broader hospitality industry, which includes hotels and travel, added 70,000 jobs. Other sectors also contributed to the employment increase, with local governments and construction companies hiring more workers. Healthcare continued its trend of steady growth, adding another 35,000 jobs last month. However, not all sectors expanded; the financial sector, encompassing banks and insurance companies, experienced a reduction of 22,000 jobs in May.

Overall, hiring has accelerated this spring after a period of slower growth last year, with an average of 188,000 jobs added each month over the past three months. The workforce also expanded slightly, as 83,000 more people either started working or began looking for jobs. The unemployment rate remained unchanged at 4.3%. Despite the increased hiring, companies are not offering much higher wages. Average wages increased by only 3.4% over the last year. This rate is likely not enough to keep pace with inflation, as consumer prices have risen by 3.8% in the same period, particularly affected by rising costs since the U.S. war with Iran began three months ago. The Federal Reserve, under its new chair Kevin Warsh, is now expected to prioritize controlling inflation, making interest rate cuts unlikely in the near future.