US Employers Add 175K Jobs, Rate Up to 7.6 Percent
WASHINGTON (AP) — The U.S. economy is adding jobs at a steady pace — enough to show strength in the face of tax increases and government spending cuts if not enough to reduce still-high unemployment.
Employers added 175,000 jobs in May, and the unemployment rate rose to 7.6 percent from 7.5 percent in April, the Labor Department said Friday. The rate rose because more people began looking for work, a healthy sign. About three-quarters found jobs.
The government revised the job figures for the previous two months. April’s gain was lowered to 149,000 from 165,000. March’s was increased slightly to 142,000 from 138,000. The net loss was 12,000 jobs.
Investors appeared pleased by the evidence that job growth remains steady. The Dow Jones industrial average was up nearly 200 points in late-morning trading.
Friday’s job figures provided further evidence of the U.S. economy’s resilience. The housing market is strengthening, auto sales are up and consumer confidence has reached a five-year peak. Stock prices are near record highs, and the budget deficit has shrunk.
The U.S. economy’s relative strength contrasts with Europe, which is gripped by recession, and Asia, where once-explosive economies are now struggling.
Many analysts expect the U.S. economy to strengthen later this year.
‘‘Today’s report has to be encouraging for growth in the second half of the year,’’ said Dan Greenhaus, an analyst at BTIG LLC.
It also eased worries that had arisen after economic reports earlier this week had suggested that the economy might be weakening.
Employers have added an average of 155,000 jobs the past three months. But the May gain almost exactly matched the average increase of the previous 12 months: 172,000.
Analysts said the less-than-robust job growth would likely lead the Federal Reserve to maintain the pace of its monthly bond purchases for at least a few more months. The Fed has said it will keep buying bonds at the same rate until the job market improves substantially. The bond purchases have helped drive down interest rates and boost stock prices.
Stock markets have gyrated in the past two weeks on speculation that the Fed would soon start to taper its $85 billion-a-month in bond buying — a step that could raise rates and cause stock prices to fall.
‘‘I think the Fed will stay on hold,’’ said Nariman Behravesh, chief economist at IHS Global Insight. ‘‘They want to see numbers above 200,000 on payroll jobs on a consistent basis before they start to taper off.’’
Behravesh said he thinks the Fed will maintain its pace of bond buying through this year before scaling it back in 2014.
‘‘Today’s report is perhaps the perfect number for nervous investors,’’ said James Marple, Senior Economist at TD Economics. ‘‘It is strong enough to point to continued economic recovery but not so strong as to bring forward expectations of Fed tapering.’’
Other analysts who have predicted that the Fed would start trimming its bond purchases later this year said they didn’t think Friday’s jobs report would change that timetable.
John Canally, an economist at LPL Financial, blames the Federal Reserve for not specifying how much monthly job growth it wants to see before it scales back its bond buying.
‘‘They have not been transparent enough,’’ Canally said. ‘‘That is what has unhinged markets.’’
Some signs in the report suggested that the spending cuts and weaker global growth are weighing on the job market. Manufacturers cut 8,000 jobs, and the federal government shed 14,000. Both were the third straight month of cuts for those industries.
The number of temporary jobs rose about 26,000, the second straight month of strong gains. That suggests that employers are responding to more demand but aren’t confident enough to hire permanent workers. Many temporary employees work in manufacturing, which cut permanent jobs.
But industries that rely directly on consumer spending hired at a healthy pace — a sign of confidence that consumers will keep spending. Retailers added 28,000 jobs. Restaurants and hotels added 33,000.
Average hourly wages ticked up just a penny in May, to $23.89. That was because much of the job growth was in lower-paying industries.
But mild inflation is boosting American’s purchasing power. Over the past 12 months, hourly wages have risen 2 percent. Inflation has increased just 1.1 percent in that time.
The economy grew at a solid annual rate of 2.4 percent in the first three months of the year. Consumer spending rose at the fastest pace in more than two years. But economists worry that the steep government spending cuts and higher Social Security taxes might be slowing growth in the April-June quarter to an annual rate of 2 percent or less.
Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Last Update on January 27, 2015 08:27 GMT
WASHINGTON (AP) -- Federal Reserve policymakers will have a batch of fresh data to consider as they begin a two-day meeting to look at interest rates.
The Commerce Department releases December data on durable goods order this morning. Factory orders slumped in November, largely due to falling demand in the military and defense sectors. But a key category that economists view as a proxy for business investment spending was flat after declines the previous two months.
Also this morning, Standard & Poor's releases the S&P/Case-Shiller index of home prices for November. The rise in prices slowed in October amid falling real estate sales. New home sales were down in November, and the Commerce Department will offer December sales figures this morning.
And the Conference Board releases its Consumer Confidence Index for January this morning. December's report showed growing optimism.
Also today, there's a full lineup of corporate earnings reports expected today. DuPont, American Airlines, Caterpillar, Procter & Gamble, 3M and Pfizer all report quarterly financial results before the market opens. Apple, Amgen, AT&T and Yahoo release results after the market closes.
WASHINGTON (AP) --The Congressional Budget Office says the federal budget deficit will shrink this year to its lowest level since President Barack Obama took office.
CBO says the deficit will be $468 billion for the budget year that ends in September. That's slightly less than last year's $483 billion deficit.
As a share of the economy, CBO says this year's deficit will be slightly below the historical average of the past 50 years.
In a report released Monday, the agency projects solid economic growth for the next few years. The official scorekeeper of Congress also expects unemployment to drop slightly.
Beyond 2018, CBO projects deficits to start rising again as more baby boomers retire and enroll in Social Security and Medicare.
NORTH DAKOTA SALTWATER SPILL
MARMON, N.D. (AP) -- The Environmental Protection Agency says more than 4 million gallons of a mixture of fresh water, brine and oil have been pumped from the area affected by the largest saltwater spill of North Dakota's current energy boom.
The federal agency made public on Monday an assessment on the nearly 3 million-gallon spill of saltwater generated by oil drilling that leaked from a ruptured pipeline. Operator Summit Midstream Partners LLC detected the spill Jan. 6, but it's still unclear exactly when it occurred and what caused it.
Saltwater, also known as brine, is an oil-production byproduct that's considered an environmental hazard.
The EPA also says dams are being constructed in case water levels rise as ice melts, and to contain the drainage of saltwater.
ARCTIC OFFSHORE LEASING
ANCHORAGE, Alaska (AP) -- Alaska's congressional delegation is expecting the federal government to pull additional areas from consideration for Arctic Ocean offshore drilling when it announces a five-year drilling plan.
U.S. Sen. Lisa Murkowski says she was briefed last week by the Interior Department on the upcoming drilling plan.
Federal waters used by subsistence hunters are other areas that were excluded from leasing in past sales. Murkowski says she was told those exclusions could be made permanent and additional areas pulled from consideration.
She's says that's another blow to development in the state, which already is suffering with the drop in oil prices.
Murkowski, Sen. Dan Sullivan and U.S. Rep. Don Young spoke at a news conference in Washington, D.C., to state their objections to pursue a wilderness designation for the Arctic National Wildlife Refuge.
WASHINGTON (AP) -- Senate Democrats have temporarily stalled progress on a bill to approve the Keystone XL oil pipeline, the top priority of the Republican-controlled Congress.
The Senate voted 53-39 Monday to cut off debate on the bill, in a procedural vote. That's short of the 60 votes needed.
The vote caps a partisan dispute over the time granted to consider amendments to the bill.
Majority Leader Mitch McConnell wants to move to pass the legislation, which has enough support. Democrats argued they needed more time to debate additions.
Some Democrats who had supported previous bills approving the pipeline, including one of the bill's current sponsors, helped filibuster the move to limit debate.
LOS ANGELES (AP) -- West Coast dockworkers and their employers have resolved a key dispute in new contract talks.
A spokesman for the Pacific Maritime Association, which represents operators of port terminals, says companies and union negotiators reached a tentative agreement on whether the union would maintain and repair truck beds that haul containers that have been unloaded from ships.
The International Longshore and Warehouse Union had no immediate comment.
Who handles truck chasses emerged as a stumbling block in contract talks. The union wanted those jobs, partly because automation at seaports could erode its membership.
Cargo has been moving slowly through West Coast ports, which link the U.S. to Asia. Employers say workers are slowing down; workers blame employers, citing the outsourcing of chassis repair as one problem.
NEW YORK (AP) -- Want a ride home from car service Uber during the major snowstorm descending on the Northeast? Expect to pay more than the usual fare.
Still, after taking heat for big price increases during past storms, Uber has capped how much prices can rise in U.S. cities during disasters or emergencies.
In New York City, surge pricing will be capped at 2.8 times -- nearly triple -- the normal fare. The San Francisco company is also planning to donate the proceeds after paying drivers to the American Red Cross. That's part of its nationwide policy during disasters and emergencies after criticism when prices surged during Superstorm Sandy in 2012.
At smaller rival Lyft, prices never go higher than three times the regular rate.
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