May jobs breakdown: Which industries saw the biggest payroll gain last month? Job gains in May 'healthier than expected,' with bars, restaurants leading the way in hiring


U.S. job growth continued at a brisk pace in May, buoyed by hiring at restaurants and bars despite concerns about a looming slowdown and record-high inflation.

Employers added 390,000 jobs in May, the Labor Department said in its monthly payroll report released Friday, beating the 328,000 jobs forecast by Refinitiv economists. The unemployment rate, meanwhile, held steady at 3.6%, the lowest level since February 2020.

"This does not look like a labor market about to tip into recession," said Daniel Zhao, senior economist at jobs review website Glassdoor. "Job gains were healthier than expected and the labor force participation rate ticked up. Despite concerns about a slowdown and even a recession, the labor market’s fundamentals look healthy."

Leisure and hospitality, one of the hardest-hit sectors during the pandemic that has become a bellwether of sorts for the economic recovery, saw a gain of 84,000 new jobs last month. Restaurants and bars saw an increase of 46,100, while hotels added 21,400 jobs last month. In all, employment in the sector is down by about 1.3 million, or 7.9%, compared with February 2020.

"Notable job gains occurred in leisure and hospitality, in professional and business services, and in transportation and warehousing. Employment in retail trade declined," the Labor Department said in the report.

Professional and business services accounted for the second-largest job growth in May, with payrolls climbing by 75,000. The increases were widespread across the industry. Computer systems design and related services rose by 13,100, accounting and bookkeeping services jumped by 15,600, and management and technical consulting services were up by 6,800. Employment in the industry is actually 821,000 jobs higher than it was in February 2020.

Transportation and warehousing also saw a hiring boom last month, onboarding 47,000 new employees. There was a big jump in hiring heavy and tractor-trailer truck drivers, with that sector adding 13,300 new workers last month. Air transportation also climbed, with 5,700 new employees. 

Now hiring jobs

"Now hiring" signs are displayed in front of restaurants in Rehoboth Beach, Delaware, March 19, 2022. (Stefani Reynolds/AFP via Getty Images) / Getty Images)

"Hiring across the economy remains robust and labor is benefiting from solid wage gains which will continue to bolster spending and likely avoid a recession in the near term," said RSM chief economist Joe Brusuelas. "However, one can clearly observe a residual slowing in hiring across most rate-sensitive sectors."

The government also onboarded many new employees last month, with payrolls climbing by about 57,000. The bulk of those stemmed from increases in state government education (36,300) and local government education (14,400).

Another source of job creation in May was the health care and social assistance sector, which was up 42,100. Hospitals hired 16,300 new employees, while individual and family services saw payrolls grow by 13,000. Ambulatory health care services, including the offices of physicians, dentists, and other healthcare practitioners, were up by 6,400.

Employment in other industries, including construction (36,000), manufacturing (18,000), wholesale trade (14,100), and financial activities (8,000), also climbed last month.

Just one sector saw a decline last month: Retail, which plunged by 60,700. The drop was most pronounced in general merchandise stores, with employment falling by 32,700. 

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