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The U.S. economy demonstrated unexpected resilience in May, adding 139,000 jobs, surpassing economists' forecasts of 126,000. This positive development occurred amidst a backdrop of heightened economic uncertainty, according to figures released by the Bureau of Labor Statistics (BLS) on Friday.

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The national unemployment rate remained steady at 4.2% for the third consecutive month, marking the 13th straight month it has been at or above 4%. However, previous months saw significant downward revisions. Job growth for April was adjusted from an initial 177,000 to 147,000, and March's figures were revised from 185,000 to 120,000. These adjustments mean that 95,000 fewer jobs were created in those two months than previously reported by the BLS.

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Wage growth continued its consistent upward trend, with average hourly earnings increasing by 3.9% year-over-year, from $34.89 to $36.24. Month-over-month wage growth also exceeded expectations. Conversely, the labor force participation rate saw a slight cooling, decreasing from 62.6% in April to 62.4% in May.

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Sector-wise, healthcare and leisure and hospitality experienced robust job growth over the month compared to other industries. In contrast, employment declined in manufacturing by 8,000 jobs and in professional and business services by 18,000 jobs. The federal government also saw a reduction in its workforce, with employment falling by 22,000 in May, a more significant decline than in recent months.

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The new BLS data is one of several recent reports painting a complex picture of the much-watched U.S. labor market. The Federal Reserve's Beige Book indicated that some businesses are delaying hiring due to economic uncertainty. Similarly, the National Federation of Independent Business reported weakening optimism among small businesses. While insured unemployment claims remain relatively low, they did see an increase in May.

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Adding to the economic pressures are ongoing discussions and actions related to tariffs, including a 90-day pause with China and increased duties on steel and aluminum, which are influencing business decisions. Andrew Challenger, senior vice president of the outplacement firm Challenger, Gray & Christmas, noted in a report prior to Friday's news release that \"Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies' workforces.\" He added, \"Companies are spending less, slowing hiring, and sending layoff notices.\" Furthermore, cuts and deferred resignations within federal government agencies could mean job seekers turn to the private sector or leave the labor force.

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The Trump administration highlighted the positive aspects of the report. President Donald Trump has argued that tariffs, despite some short-term pain for businesses and consumers, will ultimately help the U.S. economy. Echoing a positive sentiment, Deputy Secretary of Labor Keith Sonderling told BI, \"It shows us that President Trump's economy is working. For the third month now, we've beat job expectations.\" He further stated that May's jobs performance demonstrated the administration's focus on \"putting the American worker first for jobs\" is effective, adding, \"We're very excited about the numbers and the way President Trump's economy is going.\" In terms of monetary policy, CME FedWatch data, based on market trades, indicates an overwhelming probability that the Federal Reserve will opt to hold interest rates steady at its upcoming Federal Open Market Committee meeting in mid-June. This cautious approach mirrors that of business owners, as the Fed also seeks greater clarity on the evolving economic conditions.

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