US jobs data strong, seen increasing odds Fed will taper stimulus this year
Figures seen increasing odds Fed will cut back on its stimulus this year
US job growth was stronger than expected last month, and employment for the prior two months was revised higher, figures released by the labour department showed yesterday.
The numbers indicate the economy is on solid ground and are likely to keep the Federal Reserve on track to scale back its monetary stimulus later this year.
Employers added 195,000 new jobs to their payrolls, while the unemployment rate held steady at 7.6 per cent as more people entered the workforce.
The government revised payrolls for April and May to show 70,000 more jobs created than previously reported.
Economists had expected employment to increase by 165,000 last month and the jobless rate to fall a tenth of a percentage point to 7.5 per cent.
"The strong advance in the employment count provides support for the Federal Reserve to start to taper back on its quantitative easing in the near future," said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board.
The closely watched employment report was released two weeks after Fed chairman Ben Bernanke offered an upbeat assessment of the economy's outlook and said the US central bank expected to start trimming its bond purchases later this year.
Job growth averaged 196,333 per month over the last three months, closer to the 200,000 economists say the Fed wants.
The employment report also showed weekly hourly earnings rose by the most since November. That, together with other relatively upbeat data on housing, car sales and manufacturing, makes it more likely the Fed will proceed with its tapering plan.
The Fed is buying US$85 billion in bonds each month in an effort to keep borrowing costs down and spur stronger growth.
Twenty-eight of 60 economists polled by Reuters late last month said they expect the Fed to begin dialling back its purchases in September.