(Updates with payrolls data)

July 5 (Reuters) - The U.S. Federal Reserve held its

benchmark overnight interest rate steady in the 5.25%-5.50%

range at the conclusion of its June 11-12 policy meeting.

U.S. central bank officials remain uncertain about the

timing of a first rate cut and say they want to see more data

confirming that inflation will fall, even if slowly.

Among the key statistics they are watching:

EMPLOYMENT (Released July 5; next release August 2):

U.S. firms added a greater-than-expected 206,000

jobs

in June, but revisions to the prior two months knocked

111,000 positions from the previously estimated number of

payroll jobs. That pushed the three-month average total payroll

growth down to 177,000, below the level typical before the

pandemic and a development likely to be taken by the Federal

Reserve as further evidence the job market is slowing.

The unemployment rate rose slightly to 4.1%, the highest

since Nov. 2021.

Fed officials have become more comfortable with the idea

that continued job growth could still allow inflation to fall,

especially if the supply of labor keeps growing and wage growth

eases - as it did in June.

The number of people in a job or looking for work grew,

and fewer people dropped out of the labor force - both healthy

signs that nevertheless pushed up the unemployment rate. Average

hourly wages meanwhile rose 3.9% compared to a year ago, versus

a 4.1% annual increase in May. The Fed generally considers wage

growth in the range of 3.0%-3.5% as consistent with its 2%

inflation target.

JOB OPENINGS (Released July 2; next release July 30):

In a sign of the job market's continued strength, the level

of job openings rose slightly in May, while the number of open

jobs available for each unemployed person remained around 1.22,

near where it was in the years before the COVID-19 pandemic.

Fed Chair Jerome Powell has kept a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and the pandemic-era jump to more than 2 to 1 in the

number of open jobs for each available worker was emblematic of

the time.

Things have cooled substantially. Other aspects of the

survey, like the quits rate - unchanged at 2.2 since November -

have edged back to pre-pandemic levels in what Fed officials

view as an emerging balance between the supply and demand for

workers.

INFLATION (PCE released June 28; next release CPI July 11):

The personal consumption expenditures price index, used by

the Fed to set its 2% inflation target, eased in May to a 2.6%

annual rate, from 2.7% in the prior month, giving a sense that

inflation may be drifting lower as the central bank hopes.

Core prices, stripped of volatile food and energy costs,

dropped to 2.6% in May from 2.8% in April.

On a month-to-month basis, the PCE index was flat, and

officials have begun to pay closer attention to signs of

weakening demand in the economy as a precursor to a slowed pace

of price increases.

The consumer price index, meanwhile, was flat in May, the

first unchanged reading in nearly two years and a further

respite from a surprise jump in prices earlier this year. The

headline CPI rose at a 3.3% annual pace versus 3.4% in April,

while the rate was 3.4% in May after excluding food and energy

compared to 3.6% "core" inflation in the prior month.

The lower-than-expected inflation for the month could begin

rebuilding confidence among Fed officials that price pressures

are easing.