US Fed's Mester says gradual rate hikes still appropriate

The latest disappointing US jobs number has not changed the overall economic picture, and gradual rate hikes remain appropriate, Cleveland Fed President Loretta Mester said in the Swedish capital on Saturday.

"I still believe that in order to achieve our monetary policy goals, a gradual upward pace of the funds rate is appropriate," Mester told reporters.

"The timing of actually when the rate hikes would occur and the slope of that gradual path is data-dependent."

The US economy added just 38,000 jobs in May, well below the consensus estimate of 164,000 and the smallest gain since September 2010.