U.S. employment unexpectedly surged last month, continuing to defy forecasts of an economic slowdown and raising new questions about when interest rates might fall.
The U.S. Labor Department said employers added 272,000 jobs in May, beating expectations of 185,000 new jobs.
The U.S. labor market is being closely watched by the country's central bank to see whether it can withstand the pressure of borrowing costs that are the highest in more than two decades.
The Federal Reserve has raised interest rates sharply to fight inflation, which measures the pace of price increases, and it cites strong employment as a sign that the economy can handle current interest rates.
Analysts said the latest jobs data would bolster the argument that talk of lowering borrowing costs was premature.
“Today's data suggests we'll have to sit tight and wait a bit longer before the Fed considers its first rate cut,” said Richard Carter, head of fixed-rate research at investment management firm Quilter Cheviot.
He added that these figures could make any move this year “impossible.”
The Labor Department reported that average hourly earnings rose 4.1% over the past 12 months, better than expected. Economists had been expecting a 3.9% increase.
Healthcare companies, bars, restaurants and governments led the hiring, he said.
The unemployment rate, calculated in a separate survey from the employment report, rose to 4% from 3.9% in April.
