Analysts had anticipated a smaller increase. Thursday's labor report didn't substantially move Wall Street. Stocks advanced tentatively at midday, struggling to rebound after this week's technology sell-off. Many economists were predicting that Friday's report on the nation's unemployment rate for May will tick up from April's posting of 4.5 percent, stoking recession worries. The sputtering labor market concerns economists because consumers might cut spending sharply and tip the country into recession.
Consumer spending accounts for about two-thirds of the nation's economic activity.
But consumer confidence in May was lifted by the recent string of interest rate cuts, stronger financial markets and the prospect of tax cuts. The Federal Reserve Board has slashed interest rates five times this year in an effort to jump-start the economy. Jobless claims for the previous week were revised to show a larger increase than had been reported, climbing by 19,000 to 411,000. The government had reported that initial claims increased 15,000 to 407,000. For the work week ending May 19, there were 31 states and territories that reported increases in new jobless claims, and 20 reported decreases.