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.
More Business News
Last Update on May 26, 2015 07:28 GMT
WASHINGTON (AP) -- There are a slew of economic snapshots coming out today. The Commerce Department releases April durable goods, Standard & Poor's releases the S&P/Case-Shiller index of home prices for March and the first quarter, then the Commerce Department releases new home sales for April and the Conference Board releases the Consumer Confidence Index for May.
PAID FAMILY LEAVE
PROVIDENCE, R.I. (AP) -- President Barack Obama is making a renewed push for workers to get paid leave to care for a new baby or an ailing relative.
It's a call that has been taken up by other national politicians such as Democratic presidential hopeful Hillary Rodham Clinton.
Just three states provide for paid family leave-- Rhode Island, New Jersey and California.
Rhode Island began allowing workers to take up to four weeks of paid leave last year. Many workers say they love the program, and employers say it hasn't hurt business as some feared it would.
About 5,000 people have taken paid family leave in Rhode Island so far.
One of the beneficiaries, Anne Quirk, says it was a stress reliever, knowing there was going to be money to help pay the bills.
CHARTER-TIME WARNER CABLE
UNDATED (AP) -- Two people familiar with the negotiations say that Charter Communications Inc. is close to buying Time Warner Cable for about $55 billion.
The people spoke on condition of anonymity Monday because of the private nature of the deal talks.
One of the people said the deal will be announced this morning.
Charter had wanted to buy Time Warner Cable Inc. earlier, but Time Warner Cable chose a $45 billion offer from Comcast Corp. instead.
Comcast walked away from the Time Warner Cable deal after regulators pushed back against it.
TOKYO (AP) -- Japan's trade balance reverted to a deficit in April but narrowed sharply from the previous year as the plunge in oil prices cut fuel import costs.
The 53.4 billion yen ($439.6 million) deficit in April for the world's third-biggest economy compared with a 227.4 billion yen surplus in March, the first in several years.
But the Finance Industry reported Monday that it was down nearly 94 percent from April 2014, when the deficit was 825.5 billion yen.
Exports rose 8 percent year-on-year to 6.55 trillion yen ($53.9 billion) while imports dropped 4.2 percent to 6.6 trillion yen ($54.3 billion).
Strong demand for machinery and cars pushed exports to the U.S., Japan's biggest market, up 21 percent from a year earlier to 1.36 trillion yen ($11.2 billion).
ATHENS, Greece (AP) -- Greece will continue paying its debts, after its ruling Radical Left Coalition narrowly rejected a call by party hardliners to miss its next International Monetary Fund loan payment.
Syriza's central committee rejected the proposal by far left hardliners 95-75, with one blank vote. It also rejected calls to nationalize banks and hold a referendum that would give voters the power to reject any deal in Brussels with the EU and IMF over relief in exchange for more fiscal reforms.
This was just the latest push in Greece to miss an IMF payment. Last week, Nikos Filis, the leader of the party's parliamentary group, said Greece's cash crunch is so tight that it might not be able to make a June 5 payment of 300 million euros ($330 million).
Greece owes a total of 1.56 billion euros ($1.72 billion) in June. It has not received bailout aid since August and the European Central Bank has provided less help lately to Greek banks.
MANILA, Philippines (AP) -- Trade ministers from 21 Asia-Pacific countries have issued strong support to the World Trade Organization's efforts to boost global trade amid a flurry of regional free trade agreements.
The ministers from the Asia-Pacific Economic Cooperation group of nations vowed at the end of their two-day meeting on the central Philippine resort island of Boracay to ratify by December a landmark trade facilitation deal and to contribute to a work program to conclude the much-delayed Doha round of trade negotiations.
They reaffirmed in a separate document from their annual joint statement "the centrality and primacy of the multilateral trading system under the auspices of the WTO" in promoting trade and economic growth.
They also promised to exercise restraint in implementing measures consistent with WTO provisions but which have a significant protectionist effect.
At the same time, the ministers' joint statement welcomed progress on a collective study on opportunities and challenges ahead of the Free Trade Area of the Asia-Pacific.
SEOUL, South Korea (AP) -- Two key Samsung companies are merging in a step toward giving the son of the group's ailing chairman control of the theme parks to smartphones conglomerate.
Samsung says its defacto holding company, Cheil Industries Inc. will acquire Samsung C&T Corp. by offering 0.35 new Cheil shares for every Samsung C&T share.
Analysts say the move will give Samsung heir Lee Jae-yong greater control over the conglomerate including its crown jewel, Samsung Electronics Co.
The combined entity will be named Samsung C&T.
Samsung said the merger of Cheil, which is Samsung's fashion business and theme park operator, with the C&T construction and trading firm, will create a global lifestyle and biotechnology company.
VATICAN CITY (AP) -- The Vatican bank says its profit soared by more than 20 times last year as it recovered from a trading loss and continued its reform process.
The bank, officially called the Institute for Religious Works, said Monday it earned 69.3 million euros ($77.37 million) in 2014, up from 2.9 million euros the previous year.
The bank's net trading result jumped to 36.7 million euros from a loss of 16.5 million euros in 2013, when it lost money on investments and saw the value of its gold holdings drop.
Profits were also boosted by a drop in operating costs. In 2013, operating expenses jumped by some 8 million euros as it paid outside consultants to help review its client base and bring it into compliance with anti-money-laundering norms.
SAN FRANCISCO (AP) -- YouTube is 10 years old. Its legacy extends beyond its pioneering role in the Internet's video revolution.
The decade-old site has provided a stage for exhibitionists, narcissists and activists to broadcast their opinions, show off their talents, expose abuses or just pass along their favorite clips of movies, TV shows, music, cute kittens and other interests.
The rampant sharing on YouTube quickly attracted a massive audience that loved watching what they wanted when they wanted, even if much of the material was being contributed by amateurs.
YouTube's rapid rise demonstrated that influential media hubs could be built around free content supplied by an Internet service's users.
Other companies that went on to embrace a similar strategy included Facebook, which opened up the service to anyone 13 or older beginning in September 2006. That was just before YouTube's whirlwind success culminated in its $1.76 billion sale to Google Inc.
CARACAS, Venezuela (AP) -- It's still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country's official currency.
As the South American nation spirals into economic chaos, an increasing number of products are not only figuratively out of the reach of average consumers, but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.
Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It's a shift that's allowing parts of the economy to limp along despite a cash crunch and the world's highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country's 16-year-old socialist revolution.
The latest sign of an emerging dual-currency system came earlier this month when Ford Motor Co. union officials said the company had reached a deal with officials to sell trucks and sports utility vehicles in dollars only.
LONDON (AP) -- Britain's opposition Labour Party says it won't try to block a referendum on whether Britain should remain in the 28-nation European Union.
The party's acting leader, Harriet Harman, offered support for the vote in a commentary in the Sunday Times -- a U-turn on Labour's previous stance. The decision removes a potential obstacle to the referendum, which will be held by the end of 2017.
Prime Minister David Cameron of the Conservatives campaigned hard for the vote, making it a key policy during the May general election. Cameron won a majority in Parliament and Harman says it's now clear people want a chance to have their say.
However, Harman says Labour will still campaign hard to keep Britain in the EU, the world's largest trading bloc.
DEEP FREEZE-MARINA DAMAGE
GLASTONBURY, Conn. (AP) -- The deep freeze that gripped the Northeast last winter dealt a severe blow to marinas and yacht clubs: Ice snapped pilings in half, shredded wooden docks and left behind wreckage that many compare to the effects of a hurricane.
After a scramble to get ready for the all-important Memorial Day weekend, most marinas are back in business, although many are behind schedule and still in need of costly repairs to operate at full capacity.
Hardest hit were yards in rivers and coves that became choked with ice during a record-breaking stretch of frigid weather through February. Crews fought the ice with chain saws and devices that circulate warm water up from below the surface, often to no avail. As the ice rose and fell with the tide, it wrecked pilings and tore apart docks.
Veterans of the waterfront say the damage is the worst they've seen in decades.
BLACKBERRY JOB CUTS
TORONTO (AP) -- BlackBerry says it is laying off an unspecified number of employees globally as it makes changes to the operations responsible for making its smartphones.
The Waterloo, Ontario-based company said in a statement Saturday that the job cuts will affect people who make the hardware, software and applications for its phones, including devices such as the BlackBerry Bold, Classic and Passport.
BlackBerry refused to say how many jobs were being cut, but said it's looking to reduce the size of its device operations and make it profitable again.
BlackBerry had about 7,000 global employees as of 2014. About half worked in Canada.
BlackBerry began to turn a small profit last year, but its overall revenues continue to decline.
At the peak of its success, the company had about 20,000 international employees.
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