U.S. Jobs Report Preview: May Employment Trends and Economic Insights

The U.S. government’s new jobs report, scheduled for release on Friday morning, will offer an updated view of employment trends in May. This report will publish at 8:30 a.m. and detail nonfarm payroll changes, including job additions and losses, industry-specific employment changes, earnings, and unemployment rates by demographics.

In April, the economy saw an increase of 115,000 jobs, exceeding analyst forecasts. The unemployment rate remained at 4.3 percent, higher than the four percent rate when Donald Trump took office last January, but lower than its peak of 4.5 percent in November. However, these figures, including those for prior months, may undergo notable revisions with the new report.

Significance of the Report

The April report suggested a resilient U.S. labor market, despite concerns about the impact of the Iran war on hiring. The forthcoming report could further illuminate this resilience and indicate whether employment might gain momentum in 2026 following a period of low job creation, the weakest since the pandemic, and the lowest outside of a recession since 2003.

Expectations for Friday’s Jobs Report

Analysts predict approximately 85,000 jobs were added in May, a decrease from the average of 150,000 over the previous two months. If accurate, the 2026 job creation would average 78,000 jobs monthly, subject to past months’ revisions. Despite these figures, predictions vary. FactSet survey respondents estimate a gain of 105,000 jobs, while Goldman Sachs forecasts an increase of only 60,000. ADP reported that private-sector employers probably added 122,000 roles in May.

A sequence of datasets, including an increase in job openings to 7.6 million in April from 6.9 million in March, challenges the narrative of a “low-hire, low-fire” U.S. labor market. This number exceeded expectations and is the highest since May 2024. However, job cuts are increasing, with 97,006 layoffs announced in May—a 16-percent rise from April, marking the highest total for the month since 2020. In 2026, U.S. employers have reported 397,755 layoffs, a 43-percent reduction from the previous year, partly influenced by federal layoffs related to the now-defunct Department of Government Efficiency (DOGE).

Implications for Policymakers

Analysts indicate that Friday’s report could hold significant outcomes for policymakers dealing with inflation spurred by the war in Iran and rising fuel costs. Daniela Hathorn, Senior Market Analyst at Capital.com, noted that a robust report would affirm the economy’s strength but might also raise concerns about the necessity for the Federal Reserve to maintain restrictive interest rates over an extended period.