US May job report adds 172,000 jobs, spurring Fed rate‑hike bets

The U.S. Bureau of Labor Statistics reported that nonfarm payrolls rose by 172,000 in May, far exceeding analysts' forecasts of about 86,000. The unemployment rate held steady at 4.3%, with the labor force participation rate at 61.8%.

Job gains were concentrated in leisure and hospitality (70,000), local government (55,000), health care (35,000) and social assistance (12,000). Wages rose 12 cents per hour in the private sector, a 0.3% monthly increase.

The strong employment numbers sharpened expectations that the Federal Reserve will raise its benchmark rate later in 2026. The probability of a hike jumped to 73.3% on the Chicago Mercantile Exchange, prompting the 10‑year Treasury yield to climb to 4.55% and U.S. equity indices to fall: the Nasdaq down 4.18%, the S&P 500 down 2.64%, and the Dow Jones down 1.35%. The dollar also appreciated against the Mexican peso.