Nonfarm Payrolls Up 175,000 in May 9:26 AM ET Fri, 7 June 2013

Investors have been watching the employment picture for clues on Federal Reserve policy.



The Fed has been pumping $85 billion a month of liquidity into the system through purchases of Treasurys and mortgage-backed securities.

However, some members have indicated recently that the Fed ought to begin backing off the program, which has swelled the central bank's balance sheet past $3.4 trillion.

"It doesn't move the needle much either in terms of the market or in terms of when Fed tapering begins," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "It's good news. There was a whisper number that indicated we could get a really bad number, and that would have been the worst-case scenario for the market."

As it stood, the stock market loved the number and surged higher in early trading.

The Fed has stated a goal of 6.5 percent unemployment and inflation of 2.5 percent before it starts normalizing interest rates, though asset purchases are likely to wind down before that happens.

Former Fed Chairman Alan Greenspan told CNBC that the central bank ought to begin reducing its purchases, known as quantitative easing.

(Read More: Greenspan: Taper Now, Even If Economy Isn't Ready)

The unemployment rate had been moving lower in large part because of a reduction in those looking for jobs. That metric, the labor force participation rate, ticked higher to 63.4 percent in May after hitting a 35-year low in March and April.