US employers add 175K jobs, rate up to 7.6 pct.

The US economy added 175,000 jobs in May, a gain that shows employers are hiring at a still-modest but steady pace despite government spending cuts and higher taxes.
Analysts said the less-than-robust job growth would likely lead the Federal Reserve to maintain the pace of its monthly bond purchases for at least a few more months.
The Fed has said it will keep buying bonds at the same rate until the job market improves substantially. The bond purchases have helped drive down interest rates and boost stock prices.
The unemployment rate rose to 7.6 per cent from 7.5 per cent in April, the Labor Department said today. The rate rose because more people began looking for work, a healthy sign. About three-quarters found jobs.

The government revised the job figures for the previous two months. April's gain was lowered to 149,000 from 165,000. March's was increased slightly to 142,000 from 138,000. The net loss was 12,000 jobs.
Investors appeared pleased by the evidence that job growth remains steady. The Dow Jones industrial average surged 150 points in the first hour of trading.

"Today's report has to be encouraging for growth in the second half of the year," said Dan Greenhaus, an analyst at BTIG LLC.
It also eased worries that had arisen after economic reports earlier this week had suggested that the economy might be weakening.

Employers have added an average of 155,000 jobs the past three months. But the May gain almost exactly matched the average increase of the previous 12 months: 172,000.
Stock markets have gyrated in the past two weeks on speculation that the Fed would soon start to taper its USD 85 billion-a-month in bond buying, a step that could raise rates and cause stock prices to fall.
"I think the Fed will stay on hold," said Nariman Behravesh, chief economist at IHS Global Insight. "They want to see numbers above 200,000 on payroll jobs on a consistent basis before they start to taper off."

Behravesh said he thinks the Fed will maintain its pace of bond buying through this year before scaling it back in 2014.
"Today's report is perhaps the perfect number for nervous investors," said James Marple, Senior Economist at TD Economics. "It is strong enough to point to continued economic recovery but not so strong as to bring forward expectations of Fed tapering.