NEW YORK, June 5 (Reuters) - U.S. interest rate futures on Friday increased the chances that the Federal Reserves will raise interest rates by the December policy meeting after a blockbuster payrolls number for May, which sharply exceeded market expectations.
The rate futures market has now priced in a 65% chance of Fed tightening in December, compared with just 48% before the jobs report, according to LSEG estimates. For the June meeting, the market still expects the Fed to hold interest rates steady at 3.5%-3.75%.
Data showed U.S. nonfarm payrolls increased by 172,000 jobs last month after rising by an upwardly revised 179,000 in April.
Economists polled by Reuters had forecast payrolls increasing by 85,000 jobs after a previously reported 115,000 rise in April.
(This story has been refiled to say 'exceeded,' not 'exceeding,' in paragraph 1)
Reporting by Gertrude Chavez-Dreyfuss; Editing by Toby Chopra
