Updated from 9:07 a.m. EDT
Payroll growth was uneven in June, with the manufacturing sector suffering another steep decline while services industries thrived. Friday's lukewarm number pleased stock and bond investors, who worried that an overheating labor market could incite the
to more aggressive action.
Employers added 146,000 new jobs in June, about 50,000 fewer than expected, although upward revisions to figures in May and June made up the deficit. The unemployment rate fell to 5%, its lowest level since August 2001.
"Any number between 150,000 and 200,000 is positive for the economy and the stock market. Both the Fed and investors are happy with it," said Michael Sheldon, chief market strategist at Spencer Clarke. "Going forward, the Fed will keep an eye on oil, productivity and import prices."
Among sectors, service-producing industries added 150,000 jobs, while construction added 18,000 and manufacturing shed 24,000.
The report helped support stocks in the face of spiking oil. The
Dow Jones Industrial Average
was recently up 22 points to 10,325. The 10-year Treasury note added 20/32 in price to yield 4.03%.
Nothing in Friday's report should change the Fed's assessment that labor markets are gradually improving. Wage inflation remained under control, with average hourly earnings rising by 3 cents to $16.06.
Eric Goodstadt, chief marketing officer at MRI Recruiting, noted that the U.S. economy has produced an average of 180,000 jobs a month since April.
"We should definitely be happy with this," Goodstadt said. "One area I was a little surprised with was the construction sector. It has been booming for well over a year now and is showing no signs of a slow down."
The central bank's benchmark fed fund rate currently stands at 3.25% after nine consecutive quarter-point increases, the last one on June 30. The Fed has repeatedly vowed a "measured" approach to further tightening. Its next meeting is Aug. 9.
The sore spot on the labor landscape continued to be manufacturing. The 24,000-job decline is the biggest since January, and it reflects steep cuts at automakers, which shed about 18,000 positions in June.