US employment rose by slightly more than economists had predicted during May.
The latest US non-farm payrolls show that 175,000 jobs were created last month. But the unemployment rate increased slightly to 7.6%. Shares had mostly fallen in the run up to the figures, as investors worried that a strong report could lead the Fed to slow its bond-buying programme. That programme has fired up a rally in the US equities market this year. At close on Wall Street on Friday, the Dow Jones had climbed 207.50 points, or 1.38%, to 15248.12. The broader S&P 500 rose 20.82 points to 1643.38, while the Nasdaq added 45.17 points to 3469.22.Austerity programme
"Both the number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6%, were essentially unchanged in May," said the Labor Department in a statement. May was the third month in a row that non-farm payrolls increased by less than 200,000, stoking fears that the US government's austerity might be harming the economy. The spending cuts were highlighted in the latest jobs report as the federal government cut 14,000 jobs. There were also job cuts in manufacturing. However, there were job gains in professional and business services, leisure and hospitality and retail.
Analysis
A "Goldilocks" jobs report, to use a phrase coined by former Fed chairman Alan Greenspan. Not too hot, not too cold, just about right. This is what investors will have been looking for. They were worried that a jobs figure perceived as "too strong" would lead to the central bank reining in its bond-buying programme. However, the 175,000 figure - which was slightly better than expected - has left a feeling of relief that the economy is creating jobs at a steady rate. But the decline in the manufacturing sector provides a small reminder that there may still be some bumps ahead.
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