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Economy Title: US Sheds More Government Jobs In May June 3 (Bloomberg) -- U.S. employers in May added the fewest number of workers in eight months and unemployment unexpectedly rose to 9.1 percent, underscoring Federal Reserve concerns the expansion is failing to boost the labor market. Payrolls increased by a less-than-projected 54,000 last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier. The report may fan concern growth is faltering amid a pullback in consumer spending, which accounts for about 70 percent of the economy, as households grapple with rising food and fuel expenses. The failure to create more jobs raises the odds Fed policy makers will hold interest rates close to zero into next year. “It indicates just a complete loss of momentum in the labor market,” David Semmens, a U.S. economist at Standard Chartered Bank in New York, said before the report. His forecast of 65,000 was the lowest in the Bloomberg survey. “Hopefully this is just a soft patch that won’t continue. It does raise concern about consumer spending.” Factories cut payrolls in May for the first time in seven months, partly reflecting a drop at motor vehicles and parts producers that may have been related to a components shortage after the earthquake in Japan. Employment at retailers, leisure and hospitality companies and state and local governments also decreased during the month. Range of Estimates Estimates in the Bloomberg survey of 89 economists ranged from gains of 65,000 to 250,000. The unemployment rate was forecast to drop to 8.9 percent, according to the survey median. Estimates ranged from 8.7 percent to 9.1 percent. Private hiring, which excludes government agencies, rose 83,000 last month. It was projected to rise to 170,000, the survey showed. Private payrolls increased 251,000 in April, initially reported as a gain of 268,000. Factory payrolls decreased by 5,000, compared with the survey forecast of a 10,000 increase and following a 24,000 gain in April. Employment at service-providers increased 51,000. Construction companies added 2,000 workers and retailers cut 5,000 jobs. Government payrolls decreased by 29,000, reflecting reduced employment at state and local governments. Federal government payrolls rose 1,000. Earnings Pick Up Average hourly earnings rose to $22.98 from $22.92 in the prior month, today’s report showed. The average work week for all workers held at 34.4 hours. The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- was little changed at 15.8 percent after 15.9 percent in April. The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more rose as a percent. Manufacturing grew in May at the slowest pace in more than a year, according to Institute for Supply Management data this week, reinforcing concern the industry that led the U.S. recovery is cooling. Consumer spending grew less than forecast in April as households felt the pinch of grocery and energy costs, a Commerce Department report showed. Economic growth slipped to a 1.8 percent annual pace in the first three months of the year from 3.1 percent in the prior quarter, revised figures from the Commerce Department showed last week. Federal Reserve Economists including Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said the wave of weak economic data may spur Fed policy makers to support growth by making it clear after their June meeting they’re in no hurry to shrink the central bank’s record balance sheet. The Fed’s second $600 billion round of asset purchases ends this month, and it may keep reinvesting proceeds from maturing debt, they said. The Fed next meets June 21-22. “The current accommodative stance of U.S. monetary policy continues to be appropriate because the unemployment rate remains elevated and inflation is expected to remain subdued over the medium run,” Fed Vice Chairman Janet Yellen said in a Tokyo speech this week. Companies still reducing their workforce include H.J. Heinz Co., the world’s biggest ketchup maker, which in May announced plans to slash as many as 1,000 jobs worldwide and close five factories. Dean Foods Co., the largest U.S. milk processor, said it cut 600 positions last quarter and 140 early this quarter. “Job creation remains the most important factor during the economic recovery, but we do anticipate that it’s continuing to improve,” Don Johnson, vice president of U.S. sales at General Motors Co., said on a June 1 teleconference. “The environment for future hiring and investment does continue to be positive.”
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#1. To: All (#0)
When is the extension of those Bush Tax cuts goign spur hiring as we were promised by the GOP?
See Mish. Housing has hit 1987 values. Now ready to drop to 1974...
#6. To: All (#5)
The number of items for sale on the side of major roads in my area is really getting impressive. Boats, jet ski's, tractors, in front of biznesses having nothing to do with same...;}
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