Related: U.S. companies digging deeper to find and keep workers Despite the softer-than-expected wage reading, an unemployment rate drifting further below Federal Reserve officials' estimates of levels sustainable in the long run may in their view add to upward pressure on wages and inflation. That would keep the central bank on track to raise interest rates in June for the second time this year and potentially one or two more times after that in 2018.

The results may also reinforce forecasts for a rebound in economic growth this quarter after a slowdown in the first three months of the year, with the labor market supporting gains in consumer spending that may be further fueled by tax cuts. Companies in industries from services to manufacturing are hungry for workers, indicating hiring is likely to stay solid.

"We believe the U.S. labor market remains on solid footing," Sam Bullard, senior economist at Wells Fargo Securities, said in a note before the report. "That said, as labor market conditions continue to tighten and the pool of skilled workers on the sidelines continue to shrink, future monthly hiring gains are likely to slow from the current hiring pace."

Instant Insights /

Unemployment rate drops below 4 percent for first time since 2000

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