Government figures show unemployment rate at 4.3% amid rising inflation and economic uncertainty from Iran war

US employers added 172,000 jobs in May while the country’s unemployment rate held steady at 4.3%, a sign of a resilient labor market despite rising inflation and economic uncertainty brought on by continued conflict in the Middle East.

Despite the positive update on the labor market, US stocks fell sharply by Friday afternoon after a big sell-off of AI chip stocks. The tech-heavy Nasdaq index closed 4% down, the largest single-day drop in over a year. The S&P 500 and and Dow were also down 2.6% and 1.3%, respectively.

The unemployment rate was 4.4% in February, with 130,000 jobs added in January

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The US lost 92,000 jobs in February, an unexpected major slackening in the labor market that came just before Donald Trump threw the global economy into upheaval with his conflict in Iran.

The unemployment rate edged up to 4.4% in February. In comparison, the US added a revised 126,000 jobs in January, far surpassing expectations of 70,000 jobs but still less than January 2025. Economists predicted an increase of 60,000 jobs added in February and a steady unemployment rate of 4.3%.