The U.S. economy added 172,000 jobs in May and the unemployment rate held steady at 4.3 percent, the Labor Department said Friday.

Economists had expected 85,000 jobs, with forecasts ranging from 55,000 to 110,000. The unemployment rate was forecast to be unchanged at 4.3 percent.

The April gain was revised up by 64,000 to 179,000 and March was revised up by 29,000 to 214,000, for a total of 93,000 additional jobs.

Economists have been underestimating job growth for three consecutive months. The three-month average of job growth, a measure that smooths out monthly volatility and is considered by many to be a better guide to the health of the labor market, moved up to over 188,000.

The private sector added 120,000 jobs, far more than the 90,000 consensus forecast. The April estimate was revised up from 123,000 to 177,000.

Manufacturing payrolls jumped by 7,000, beating all estimates. The prior month’s initial estimate of a loss 2,000 was revised to unchanged. Durable goods employment expanded by 17,000, including 3,600 jobs in motor vehicles and parts manufacturing.

Mining, which includes oil and natural gas drilling, added 4,000. Construction added 17,000.

The services side of the economy added 92,000 jobs. The biggest contributor was leisure and hospitality, where employers expanded payrolls by 70,000.

Employment in healthcare and social assistance expanded by 47,500.

Retail and wholesale payrolls shrank, and transportation and warehousing increased by just 600 jobs. Finance and information payrolls contracted. Professional and business services added 6,000 workers.

The federal government added 1,000 jobs in May after two consecutive months of shrinking payrolls.  Compared with a year ago, federal government payrolls are down by 311,000, reflecting President Donald Trump’s efforts to reprivatize the U.S. economy. Compared with the peak of federal employment in October of 2024, payrolls are down by 346,000.

State governments shed 4,000 workers. Local governments added 55,000.

Average hourly earnings for all employees on private nonfarm payrolls rose 0.3 percent. Over the year, average hourly earnings have increased by 3.4 percent. The average workweek was unchanged.

The labor market in the U.S. has experienced a significant shift away from dependence on an immigration-driven workforce. Jobs numbers that may seem anemic compared with recent years may actually indicate healthy—even robust—growth under current conditions, according to economists.

Many economists now estimate the so-called “break-even” rate of job growth—the rate required to keep unemployment from rising—may be as low as zero. By contrast, when immigration was at higher levels from 2021 through 2024, the economy needed to add more than 100,000 jobs per month to keep pace with labor force growth.

Retirements are also slowing labor force growth, as an increasing number of members of the large baby boom generation leave the workforce and, later, smaller generations fail to fully replace them.

The labor force grew by 83,000 and the population expanded by 99,000. The participation rate was unchanged at 61.8 percent. The number of people who said they are employed grew by 149,000 and the number of unemployed people shrank by 66,000.