U.S. economy added 172,000 jobs in May,driven by a jump in hospitality as businesses geared up for World Cup. Bureau of Labor Statistics (BLS) said leisure and hospitality alone accounted for 70,000 of these new positions. Big leap from average monthly gain of 14,000 over last year.
Food and drink spots contributed 48,000 jobs. With the tournament co-hosted by U.S., Mexico,and Canada,bars,restaurants and hotels are boosting staff. But unemployment rate stayed at 4.3%.
Economists expected a smaller increase of 105,000 jobs,making actual numbers a surprise . Revisions to March and April data showed extra 93,000 jobs,showing labor market's strength.
But concerns about World Cup's economic impact linger. Hiring may be strong,but high costs of attending could hit consumer spending . Hotels report slow bookings,fans upset over $1,000 ticket prices. President Trump said he "wouldn't pay it either" for Paraguay match in June.
FIFA under scrutiny for alleged price manipulation. New York,New Jersey attorney generals investigating. No comment from FIFA yet.
Job gains could affect monetary policy,with economists hinting at possible interest rate hike by end of 2026. Though jobs news is good, wage growth has slowed. Average hourly earnings up 3.4% in past year,inflation at 3.8%, driven by energy prices amid U.S.-Israel conflict with Iran.
James Knightley,chief U.S . economist at ING,said household spending squeeze is worsening. Real disposable incomes down three months in row,consumer confidence low . "Long way to go before year's end," he said, hinting at rate cuts if Strait of Hormuz issue resolved. It's a critical shipping lane now shut by geopolitical tensions.
Besides hospitality,local government jobs rose by 55,000,healthcare added 35,000 . BLS noted gains in social work,mining,quarrying,oil and gas extraction. But financial services lost 22,000 jobs in May,105,000 since last May's peak .
