The Bureau of Labor Statistics released May employment figures on Friday.
The US economy added 139,000 jobs in May, exceeding economists’ expectations of 126,000 new positions.
Despite the stronger-than-anticipated job growth, the unemployment rate remained unchanged at 4.2% for the third consecutive month.
This marks the 13th straight month that unemployment has stayed at or above 4%.
Revisions to previous months’ data show a downward adjustment in job growth.
April’s job gains were revised down from 177,000 to 147,000, while March’s numbers dropped from 185,000 to 120,000.
Overall, this means there were 95,000 fewer jobs created in those two months than previously reported.
The latest employment data provides a mixed picture of the US labor market amid economic uncertainty.
A recent Federal Reserve Beige Book report noted that many businesses are being cautious and delaying hiring decisions.
Additionally, the National Federation of Independent Business highlighted weakening optimism among small businesses.
Although claims for unemployment insurance remain low, they increased somewhat in May.
Trade tensions and tariffs continue to weigh on business confidence.
For example, a recent 90-day pause on tariffs with China and increased duties on steel and aluminum have created additional pressure.
Government budget cuts and deferred retirements in federal agencies may lead some job seekers to move to the private sector or exit the labor force entirely.
Andrew Challenger, senior vice president at the outplacement firm Challenger, Gray & Christmas, explained the impact of these challenges.
He said, “Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces.”
Challenger added, “Companies are spending less, slowing hiring, and sending layoff notices.”
Meanwhile, President Donald Trump has maintained that tariffs will ultimately benefit the US economy, despite short-term difficulties for businesses and consumers.
Market expectations, as reflected by CME FedWatch, indicate a strong likelihood the Federal Reserve will keep interest rates steady at its next policy meeting in mid-June.
Like business leaders, the Fed is awaiting clearer signals on the direction of the economy before making changes.