NEW YORK (AP) – Stocks rose in early trading Friday as investors found reason for optimism from stronger-than-expected job creation in May and signs of easing inflation.

Wall Street was pleased to see that nonfarm payrolls rose by 157,000 last month, a bigger increase than in April and more than analysts anticipated. The unemployment rate held steady at 4.5 percent, as expected, according to the Labor Department report.

Investors have been trying to glean from recent economic data any clues about the future of the economy and the direction of interest rates. The market hopes a slowing economy will prompt the Federal Reserve to eventually lower rates, but at the same time it wants growth to bounce back later this year – and it views a steady job market as a key component to recovery.

And assuaging some fears about inflation was the Commerce Department’s report Friday of a slight decrease in the year-over-year core index of personal consumption expenditures, which strips out energy and food prices. The year-over-year core PCE registered at 2.0 percent in April, down from 2.1 percent and within the Fed’s comfort zone of 1 to 2 percent.

In the first hour of trading, the Dow Jones industrial average rose 54.69, or 0.40 percent, to 13,682.33.

Broader stock indicators also gained. The Standard & Poor’s 500 index rose 7.25, or 0.47 percent, to 1,537.87, and the Nasdaq composite index rose 16.83, or 0.65 percent, to 2,621.35.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.93 percent from 4.89 percent late Thursday. The dollar was against other major currencies, while gold prices fell.

Later Friday morning, the market will be parsing the Institute for Supply Management’s May survey of its members, who comprise purchasing executives at manufacturers across the country. Perhaps the most eagerly awaited component of the index will be the prices manufacturers paid for raw materials last month – in minutes of its May 9 meeting released Wednesday, the Fed reiterated the concerns about inflation that have so far deterred it from cutting rates.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com