U.S. job growth beats expectations; unemployment rate steady at 3.6%

In May, employment in the United States expanded more than predicted, while the unemployment rate remained unchanged at 3.6 percent, indicating a tight job market that could put the Federal Reserve's foot on the brakes to dampen demand.

The Labor Department reported in its carefully awaited employment report on Friday that nonfarm payrolls climbed by 390,000 jobs last month.

Payrolls rose by 436,000 jobs in April, up from 428,000 originally projected, according to revised data.

Reuters polled economists, who predicted that payrolls would rise by 325,000 jobs last month. Estimates ranged from as little as 250,000 to as many as 477,000 new employment.

The data also revealed significant pay rises in the previous month, painting a picture of an economy that is still growing, albeit at a slower pace.

The Fed is attempting to contain inflation by dampening labor demand without driving the unemployment rate too high.

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