May’s labor report paints a mixed picture: job openings came in around forecasts, but hiring cooled and layoffs ticked higher, suggesting the market is steady rather than surging. The Bureau of Labor Statistics data released Tuesday underline why economists are watching monthly hiring and quits closely to judge momentum.
Employers continue to list vacancies, yet they are not converting those openings into hires at the pace seen during the post-lockdown boom. Gross hiring — the total number of people brought on before accounting for separations — fell to about 5.17 million in May from 5.26 million in April. By contrast, during the hot labor market between mid-2021 and mid-2023, monthly gross hiring often exceeded 6 million.
Layoffs increased in May, while the number of workers voluntarily leaving jobs — a conventional barometer of confidence known as quits — edged up only slightly. Economists say that pattern points to a market that can absorb shocks but lacks the robust churn that fuels wage gains and rapid hiring.
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“The hiring switch needs to fully turn on for the labor market to feel alive again,” said ZipRecruiter economist Nicole Bachaud, noting the gap between advertised roles and actual hiring.
Global events have added pressure. After U.S. and Israeli strikes on Feb. 28, Iran closed the Strait of Hormuz — a key route for roughly one-fifth of the world’s oil and gas — which sent energy prices higher and raised costs for consumers already squeezed by inflation.
Still, the U.S. job market has recovered from a weak 2025. Through the first five months of this year, employers have averaged nearly 114,000 net hires per month, a marked improvement over the roughly 9,700 monthly gains recorded in 2025, which was the slowest hiring stretch outside a recession since 2002.
Several structural factors are reshaping how many hires are needed to keep unemployment stable. Baby boomer retirements and tighter immigration enforcement have reduced the labor force, lowering the number of new jobs required to maintain a steady unemployment rate. Economists now say the so-called break-even hiring rate could be close to zero in some estimates, versus perhaps 150,000 a month a year or so ago.
- Gross hiring (May): ~5.17 million (down from 5.26 million in April)
- Average monthly net jobs (first five months of year): ~114,000
- Average monthly net jobs (2025): ~9,700
- Expected June payrolls: ~100,000 (unemployment forecast near 4.3%)
Federal policy and macro conditions also matter. Last year, elevated interest rates and uncertainty around fiscal and regulatory direction restrained firms’ willingness to expand payrolls. At the same time, tax policy changes and greater domestic energy production have softened what could have been a sharper slowdown from geopolitical disruptions.
Looking ahead, the June jobs report due Thursday will be watched for further signs of whether hiring is stabilizing or cooling. For workers, a softer hiring pace can mean slower wage growth and fewer opportunities, while for policymakers it complicates the trade-off between containing inflation and supporting employment.
In short, the labor market remains durable but uneven: openings are plentiful on paper, yet actual hiring has not returned to the vigorous levels that powered recent wage and job gains. How employers respond in the coming months will shape both worker prospects and economic momentum into the second half of the year.
