WASHINGTON — The U.S. economy added 175,000 jobs in May— a steady pace that shows strength in the face of tax increases and government spending cuts if not enough to reduce still-high unemployment.
The unemployment rate rose to 7.6 percent from 7.5 percent in April, the Labor Department said Friday. The rate rose because more people began looking for work, a healthy sign, but only about three-quarters found jobs.
Analysts said the less-than-robust job growth would likely lead the Federal Reserve to maintain the pace of its monthly bond purchases for a few more months. The bond purchases have been intended to ease long-term borrowing costs and lift stock prices.
Investors appeared pleased by the evidence that job growth remains steady. The Dow Jones industrial average was up about 172 points in late-afternoon trading.
Yesterday’s job figures provided further evidence of the U.S. economy’s resilience. The housing market is strengthening, auto sales are up and consumer confidence has reached a five-year peak. Stock prices are near record highs, and the budget deficit has shrunk.
The U.S. economy’s relative strength contrasts with Europe, which is gripped by recession, and Asia, where once-explosive economies are now struggling.
Many analysts expect the U.S. economy to strengthen later this year.
“Today’s report has to be encouraging for growth in the second half of the year,” said Dan Greenhaus, an analyst at BTIG LLC.
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.
Reflecting a trend in recent months, many of the jobs added in May were lower-paying ones. That means they aren’t likely to fuel as much consumer spending and economic growth as higher-paying jobs that have disappeared.