(Reuters) - The Federal Reserve is far less likely to start cutting interest rates as soon as September, traders bet on Friday, after a U.S. government report showed employers created many more jobs and paid higher wages last month than expected.

Nonfarm payrolls rose 272,000 in May, compared with the 185,000 expected, and average hourly earnings rose 4.1% from a year ago, outpacing the 3.9% rise that economists had anticipated. March wage data was also upwardly revised to show hourly earnings gained 4%, instead of the earlier reported 3.9%.

After the report, futures contracts that settle to the Fed's policy rate now imply a 53% chance of a rate cut from the current 5.25%-5.5% range by September, compared with about a 70% chance seen before the report.

U.S. central bankers have said they plan to wait on rate cuts until they are more confident that inflation is declining toward their 2% goal; if anything, Friday's wage data suggests pressures are pushing prices the other way.

Although the unemployment rate unexpectedly crept up to 4%, from 3.9% previously, the outsized increase in job creation defied expectations that the labor market is cooling in a way that could aid the Fed's fight against inflation.

Rate futures show traders are now less confident the Fed will deliver more than a single rate cut by year's end, with traders pricing in about an even chance of two rate cuts by the end of 2024, versus about a 68% chance seen before the report.