The unemployment rate in the United States climbed to 6.1 per cent last month, the highest level in nine years, as businesses cut 17,000 jobs in a weak economy struggling towards recovery.
However, the Labour Department's survey of businesses showed the pace of job cuts is slowing after 114,000 workers were fired in the first quarter. Last month's jobless rate, derived from a separate survey of households, is the highest since the 6.4 per cent recorded in July 1994, and up from 6 per cent in April.
'There's a sigh of relief' in the payroll statistics, former Federal Reserve governor Laurence Meyer said. 'There's a really strong case for an improvement in the economy.'
US Treasury securities fell after the report. An 8 per cent rise in the Dow Jones Industrial Average this year, low interest rates and improving consumer confidence advance the prospects that households will spend the extra money they are getting from the tax cuts signed into law last month.
Export-dependent economies in East Asia are highly dependent on US spending and have rallied strongly in recent weeks on hardening evidence of an upturn in demand from US companies and households.
Excluding declines in government jobs in April and May, private payrolls increased 10,000 over the two months after falling 105,000 in the first quarter.