US President Donald Trump celebrated a stronger-than-expected jobs report on Friday, declaring that the latest employment figures showed the American economy firing on all cylinders, while also offering a brief but upbeat assessment of ongoing nuclear negotiations with Iran, saying the talks "seem to be going quite well." Trump made the remarks as he arrived in Wisconsin for an agricultural event, though he offered no further detail on the state of the Iran discussions.

The May jobs report gave the White House significant cause for optimism. Employers added 172,000 jobs last month — well above the forecasts of many economists, some of whom had predicted as few as 110,000 — marking the third consecutive month of gains. The unemployment rate held steady at 4.3 percent, and upward revisions to March and April figures added a further 93,000 jobs to the tally. Kevin Hassett, director of the White House National Economic Council, described the labour market as "hitting on all cylinders."

Economists, however, offered a more nuanced picture. Diane Swonk, chief economist at KPMG, a multinational accounting and advisory firm, noted that the headline numbers masked significant underlying strain. Much of the growth was concentrated in the service sector, particularly leisure and hospitality, where preparations for the upcoming FIFA World Cup and spending by higher-income earners have driven hiring to its strongest pace since early 2023. Local government hiring also contributed a surprise boost of more than 50,000 jobs. But Swonk cautioned that the bottom two-thirds of wage earners are seeing their purchasing power erode, with inflation expected to exceed 4.2 percent when May's consumer price index is released. The number of underemployed workers and those forced into part-time roles remains elevated, and the quit rate — a key measure of worker confidence — fell in April to its lowest level since August 2020.

The strong jobs data has complicated the outlook for interest rates. The Federal Reserve, now under the recently appointed chair Kevin Warsh, faces growing internal pressure to raise rates rather than lower them, as persistently high inflation — described by Swonk as "the most regressive of taxes" — threatens to widen inequality and undermine a more broadly shared recovery. Financial markets are increasingly pricing in the likelihood of a rate hike at the Fed's next meeting in roughly two weeks.

The report was also shadowed by questions about institutional reliability. Following the Trump administration's dismissal of the head of the Bureau of Labor Statistics, some observers have raised concerns about the integrity of official data. Swonk said the current figures are "as good as they can be," but acknowledged that the loss of around 350,000 federal agency workers since October 2024 — leaving federal employment at its lowest level since 1966 — has created staffing shortages that could affect future statistical quality. Meanwhile, the broader economic backdrop remains shaped by the ongoing war with Iran, which continues to weigh on business confidence even as the labour market shows resilience.