US labor market adds 172,000 jobs in May, nearly doubling expectations

The US economy added 172,000 nonfarm payroll jobs in May, nearly doubling the 85,000 to 88,000 that economists had penciled in. The Bureau of Labor Statistics released the data on June 5, and the message was clear: the labor market isn’t cracking.

The unemployment rate held steady at 4.3%, while prior months got even rosier in hindsight. March and April job figures were revised upward by a combined 93,000 positions.

The numbers beneath the numbers

Leisure and hospitality drove a significant chunk of the gains. Think hotels, restaurants, and entertainment venues continuing to staff up. Financial activities, on the other hand, actually shed jobs.

Low hiring rates and rising long-term unemployment are lurking beneath the surface. The economy is adding jobs, yes, but the people who’ve been out of work for extended periods are finding it harder to get back in.

What the Fed is probably thinking

A labor market adding jobs at nearly twice the expected pace gives the Fed very little reason to cut interest rates. The central bank has consistently said it needs to see cooling in the jobs market before easing monetary policy, and 172,000 new positions is not what cooling looks like.

The steady 4.3% unemployment rate adds to the Fed’s comfort level. It’s not low enough to signal an overheating economy, but it’s not high enough to trigger alarm bells either.

What this means for crypto investors

Strong jobs data and prolonged higher interest rates have historically been a headwind for risk assets, and crypto sits squarely in that category. When Treasury yields remain attractive, capital tends to flow toward safer, yield-bearing instruments rather than volatile digital assets.

Bitcoin, Ethereum, and Solana are all sensitive to shifts in macroeconomic policy expectations. When you can earn meaningful yield on government bonds with essentially zero default risk, the opportunity cost of holding non-yielding crypto assets goes up.

The mixed signals in the underlying data do offer a silver lining for crypto bulls. If long-term unemployment continues to rise and hiring rates remain subdued, the Fed could eventually pivot despite the strong headline numbers.

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