The Labor Department said Friday that the economy also added 20,000 more jobs in May and 50,000 more in April than initially reported. The unemployment rate stayed at 7.6 percent, but for a good reason: More people started looking for work. The government counts people as unemployed only if they are searching for jobs.
Stock index futures rose shortly after the report was released at 8:30 a.m. EDT. And the yield on the 10-year Treasury note jumped from 2.56 percent to 2.65 percent, a sign that investors think the economy is improving.
The economy has added an average of 202,000 jobs a month for the past six months, up from 180,000 in the previous six. Hiring and consumer confidence have increased despite higher taxes and federal spending cuts.
Further job growth could lower the unemployment rate and help the economy rebound after a weak start this year. If growth accelerated and unemployment fell, the Federal Reserve might start to scale back its bond purchases before the year ends. The bond purchases have kept long-term interest rates low.
Despite the solid pace of hiring, the economy is growing sluggishly. It expanded at a 1.8 percent annual rate in the January-March quarter. Most analysts expect growth at roughly the same subpar rate in the April-June quarter.
Weak economies overseas cut demand for U.S. exports in May. That led some economists to predict that growth in the second quarter might be slower than forecast. Still, many areas of the economy are improving.
The Fed's low interest-rate policies have encouraged more Americans to buy homes and cars. They've also helped boost stock and home prices in the first half of the year, increasing wealth and lifting consumers' confidence to its highest level in 5 1/2 years.
Auto sales in the January-June period topped 7.8 million, their best first half since 2007, according to Autodata Corp. and Ward's AutoInfoBank. Sales of previously occupied homes exceeded 5 million in May, the first time that's happened since November 2009. New-home sales rose at their fastest pace in five years.
Though fewer exports have hurt manufacturing, factories did field more orders in May. And a measure of business investment rose for the third straight month.