Even so, the job report also showed the May unemployment rate at 4.2 per cent, the lowest in 29 years, and down from April's 4.3 per cent rate. Even more worrisome for inflation-watchers, the government said average hourly wages rose a nickel last month.

So Wall Street can't stop worrying yet, economists said, though they concede that the Fed's next move is a close call. If the next big economic number, the consumer price index, shows any signs of inflation, it could sway the central bank to raise interest rates. The CPI reportis due June 16. The Dow Jones industrial average closed up 136.15 points, or 1.28 percent, at 10,799.84. For the week, the Dw was up 240.10.