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US jobs growth was almost twice as strong as forecast in May, an unexpected sign of labour market resilience ahead of a Federal Reserve decision on whether to hold interest rates steady or push ahead with another increase.

The economy added 339,000 new non-farm jobs last month, according to figures published by the Bureau of Labor Statistics on Friday, compared with expectations of about 195,000. Figures for the previous two months were also revised upwards.

Job gains were broad-based, with strong additions in professional services, healthcare, leisure and hospitality and construction.

“It’s hard based on this and other recent data to conclude that the labour market is slowing enough to take the heat off inflation,” said Nancy Vanden Houten, lead US economist at Oxford Economics.”

However, while the headline payrolls data, which is based on responses from businesses, suggested an extremely hot jobs market, the BLS’s survey of households presented more signs of cooling.

It showed a 310,000 reduction in the number of people that are employed, which pushed the jobless rate to 3.7 per cent, from 3.4 per cent in April. Month-on-month wage growth cooled to 0.3 per cent and edged down on an annual basis to 4.3 per cent — though it remained well above the roughly 3.5 per cent level that is generally seen as a requirement for the Fed to hit its 2 per cent inflation target.

Vanden Houten cautioned that the household data tends to be more volatile than the “establishment” survey, and noted that much of the decrease in employment was driven by the self-employed, with the number of salaried employees continuing to rise.

Employment and wage growth are core drivers of inflation, particularly in the services sector, and economists and officials have been watching for signs of a slowdown in these measures as an indicator that price pressures are also on course to slow.

The unexpectedly strong report could challenge expectations that the central bank will pause its cycle of interest rate increases at its next meeting in mid-June after 10 consecutive rate rises.

Following the data, investors added to bets that the Fed would raise interest rates again this summer. Futures markets priced in a roughly 30 per cent chance of an interest rate increase in June, but a more than 80 per chance of an increase by the following meeting in July.

Investors also scaled back their expectations of whether the Fed will begin to cut rates later in the year.

The two-year Treasury yield, which moves with interest rate expectations, rose 0.05 percentage points to 4.39 per cent.

Several senior central bank officials had suggested this week they could pause tightening for a month to give themselves more time to assess the effect of their actions so far.

Philip Jefferson, President Joe Biden’s pick to become the next Fed vice-chair, said on Wednesday that “skipping a rate hike at a coming meeting would allow the committee to see more data before making decisions about the extent of additional policy firming”. However, he added that a pause would not stop the central bank from resuming increases in July.

Philadelphia Fed president Patrick Harker also suggested skipping a rate rise for one meeting.

However, Friday’s data is the latest in a series of figures that have reinforced the challenges of bringing inflation back towards its target level, following elevated job openings and stubbornly high core inflation figures. Cleveland Fed president Loretta Mester told the Financial Times earlier this week that there was “no compelling reason to pause”.

Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, said the report “marginally” increased the likelihood of the Fed raising rates in June but the “mixed bag” of data was likely to preclude any major shifts in attitude among policymakers.

“I would like to think that the Fed takes the precautionary principle — if you’re in a dark room you move slowly, [and] today’s data doesn’t shine a lot of light” he said.

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