Two hundred and seventy two thousand new jobs in one month.

From Marketplace, I'm Sabrie Beneshore in for David Brancaccio.

We just learned the U.S. economy added two hundred and seventy two thousand jobs in May. Not only is that a lot more than

many economists predicted, it is 110,000 more jobs than were added to the economy the

month before. On the other hand, the

unemployment rate did take up to 4%. So what does all that mean? This is why we

have Christopher Lowe joining us. He's chief economist at FHN Financial in New York. Hi Chris.

Good morning, Sabrie.

So on the positive side, we got a lot more jobs added to the economy. How positive is that? It's certainly good news for service workers.

Most of the jobs were in the service sector. There were big gains in health care, big gains in leisure and hospitality.

Those have been the two primary engines of job growth for the last couple of years

and they continue to put up big numbers.

On the other hand here we did see the unemployment rate tick up 4%.

How bad is that if it is bad?

Well, what I can say is it's real.

Look back a year, the unemployment rate was 3.4 percent.

It was extraordinarily low.

In fact, it was one of the things making the Federal Reserve really uncomfortable.

They thought that the unemployment rate was so low that companies would start bidding up wages

and that would become an inflation concern.

Unemployment rate at 4.0% today is in fact consistent with what the Fed considers neutral from an inflation perspective.

Speaking of the Fed, their meeting next week, what does all of this put together mean for them and the interest rates that

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