The U.S. labor market is expected to show continued modest growth in May, with employers likely adding 105,000 jobs according to forecasts compiled by FactSet. The Labor Department will release the monthly employment report Friday.

The projected job gains would represent a decline from April's 115,000 new positions but would still mark solid progress by recent standards. Unemployment is expected to remain at 4.3% in May. Hiring has rebounded this year from a weak 2025, when employers added just 9,700 jobs per month on average, the fewest outside a recession since 2002.

From January through April this year, job creation averaged 76,000 new positions monthly. The recovery has shown resilience despite economic uncertainty and elevated energy prices stemming from the Iran conflict, with gasoline remaining above $4 per gallon following U.S. and Israeli military action against Iran in late February.

Healthcare companies have driven much of the job growth, adding more than 456,000 positions over the past year while all other U.S. employers collectively cut 205,000 jobs. Economists attribute healthcare's strength to an aging population requiring more medical services, noting the growth aligns with decade-old Labor Department projections for the sector.

The current labor market presents challenges for job seekers, particularly young workers and those who have been laid off. More than a quarter of unemployed Americans in April had been without work for over six months, up from less than 20% two years ago. Workers are increasingly reluctant to leave current positions, with April showing the lowest quit rate since August 2020.

Economists note that the U.S. economy requires fewer new jobs than previously to maintain stability due to reduced immigration and rising Baby Boomer retirements. The break-even point for keeping unemployment stable has likely dropped to near zero from the typical 155,000 monthly jobs needed two to three years ago, according to Federal Reserve analysis.