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One thing you can say about the U.S. economy is that it is remarkably resilient, even if there are some storm clouds on the horizon. 

The latest U.S. jobs report blew past expectations and showed a gain of 172,00 jobs in May, even though the unemployment rate remained unchanged at 4.3 percent. What’s more, the Trump administration revised the employment numbers upward for March and April.

One thing you can say about the U.S. economy is that it is remarkably resilient, even if there are some storm clouds on the horizon. 

The latest U.S. jobs report blew past expectations and showed a gain of 172,00 jobs in May, even though the unemployment rate remained unchanged at 4.3 percent. What’s more, the Trump administration revised the employment numbers upward for March and April.

In other words, the worries about stagflation and a sluggish economy may be overblown, despite Trump administration policies that are weighing down the economic recovery, such as widespread tariffs and a war in Iran that has raised energy prices.

That is great news for incoming Federal Reserve Chair Kevin Warsh, who has to balance a dual mandate that seeks to both defeat inflation and raise employment. Coupled with a not-dead-yet 1.6 percent GDP growth in the first quarter, the Trump economy is almost surpassing even low expectations.

The U.S. jobs numbers matter for the rest of the world for a simple reason: They influence the rate at which the Federal Reserve eases, or tightens, the money supply. Many countries have debt (lots of it, actually) that is denominated in dollars. If the Fed is relaxed, then so is the rest of the world. 

And the Fed should be relaxed, given the latest report, because it only has one dragon to slay.

“The surge in payrolls in May along with upward revisions in prior months are more than enough to allow the Federal Reserve to keep policy steady for an extended period as it focuses on the inflation side of its dual mandate,” Oxford Economics said in a research note released on June 5.

There is, though, one dark spot in the latest employment numbers, as in many before them: While the U.S. jobs market is churning for things such as health care, leisure, and local government, mining and manufacturing remain afterthoughts.

“Over the month, food services and drinking places added 48,000 jobs,” the U.S. Bureau of Labor Statistics said. It does make perfect sense these days. On the other hand, “employment showed little change over the month in other major industries, including construction, manufacturing, wholesale trade, retail trade, information, professional and business services, and other services,” it added.

U.S. President Donald Trump’s tariffs and wars have made inputs—items such as raw materials, oil, gas, diesel, steel, aluminum, and more—more expensive, which has acted as a sea anchor on the otherwise healthy economy. In testimony before the Senate this week, U.S. Treasury Secretary Scott Bessent sought to boast about the health of the U.S. manufacturing sector but misplaced his data. Actually, there is not a rebound in investment or construction in manufacturing facilities in the United States but a collapse. The golden age got tarnished. 

That said, Trump’s economy has not been a trainwreck, but it has shown record-high stock market tickers and decent GDP growth. What is not helpful are self-inflicted wounds, whether tariffs or Tomahawks.