WASHINGTON (TND) — The job market has surprised economists three times this week with strong reports showing high levels of openings and hiring, adding to the difficulty of the Federal Reserve’s decision over whether to pause their record-setting pace of interest rate increases this month.

Friday’s jobs report from the Bureau of Labor Services said U.S. employers added 339,000 jobs in May, coming in well above expectations. The figure was an increase from 294,000 in April.

Despite an uptick in hiring, there was also an increase in unemployment to 3.7% from 3.4% in April. The 0.3% increase was the highest increase since April 2020, though overall unemployment is still low by historical standards.

“We are in the soft landing territory, things are slowing down,” said Rucha Vankurde, senior economist at Lightcast.

The White House celebrated Friday’s jobs report.

“Today is a good day for the American economy and American workers,” President Joe Biden said in a statement, touting the number of jobs created under his watch and unemployment staying below 4% for 16 consecutive months.

Wage gains also cooled in the latest data, as average hourly earnings increasing 0.3% from April and 4.3% higher than the year before. The Fed has watched wage growth as a critical part of its mission to return inflation to its 2% year-over-year goal.

Another positive sign from Friday’s jobs report was the labor participation rate for prime-aged workers 25 to 54 reached 83.4% in May, the highest level since 2007. The overall participation rate still remains below pre-pandemic levels.

The jobs data adds another wrinkle to the Fed’s decision on whether to skip increasing interest rates at its meetings coming up this month. Interest rates have gone up from near-zero to 5% during the Fed’s crackdown on inflation, which have made it more expensive to borrow money in a bid to slow the economy.

“They want to see they want to see the economy slow down,” said Giacomo Santangelo, economist at Monster. “They want to see GDP growth slowing, they want to see unemployment go up, because that is a sign that employers are pulling back, which is a whole reason why they’re using the lever of interest rates in order to attack the economy, to kind of let the air out of that bubble. I would not be surprised if we keep seeing increases in the interest rate this month.”

Some economists are questioning how long the labor market will be able to hang on through inflation, higher interest rates and through concerns about a potential recession. But the White House said it is optimistic about the economic future.

“We can focus on what we’re seeing right now, which is continued strength, continued resilience. There are a range of reasons to think that that continued strength and resilience can in fact, continue,” said Daniel Hornung, special assistant to the president for economy.

Consumers have continued to spend despite higher prices taking a bite out of their purchasing power, but it’s unclear how long they will be able to keep that up. Data from the New York Federal Reserve Bank found more people are struggling to stay current on their credit card bills and a consumer confidence index kept by the Conference Board has Americans are expecting a recession within the next year.

“We’ve gotten to the point where when you get up in the morning and you go to your local deli to get your breakfast sandwich, you’re charging it to your credit card which means that six months from now, you’re still going to be making payments on your June 2 breakfast sandwich because we literally don’t have the money,” Santangelo said. “So, that is a possible reason why consumers are like ‘we’re screwed.’”

Also hanging over the economy is the signing of a debt ceiling deal negotiated by Biden and House Republicans that is going to be signed into law. The spending agreement is expected to have a limited impact on the economy overall, reaching a deal avoids an unprecedented default that could have sent the economy into a devastating recession.

“This bill really lifts a cloud of economic uncertainty that was over the outlook puts that off until 2025 and allows this economic recovery to continue and our job market recovery to continue as well,” Hornung said.