US busi­ness hir­ing rises in May to 201,000: sur­vey

The China Post - - WORLD BUSINESS - BY CHRISTO­PHER S. RU­GABER

U. S. com­pa­nies stepped up hir­ing in May, a pri­vate sur­vey found, ev­i­dence that em­ploy­ers re­main con­fi­dent in the econ­omy even af­ter it con­tracted at the start of the year.

Pay­roll pro­ces­sor ADP said Wed­nes­day that busi­nesses added 201,000 jobs last month, up from just 165,000 in the pre­vi­ous month. April’s in­crease was the small­est in a year and a half.

The fig­ures sug­gest that

the econ­omy is re­cov­er­ing af­ter it shrank at a 0.7 per­cent an­nual rate in the first quar­ter. On Fri­day, the gov­ern­ment will is­sue its of­fi­cial jobs re­port for May. Econ­o­mists fore­cast it will show that em­ploy­ers added 227,000 jobs, and the un­em­ploy­ment rate re­mained 5.4 per­cent.

“The rel­a­tive strength in to­day’s re­port is an en­cour­ag­ing sign that the la­bor mar­ket, and the econ­omy, is reac­cel­er­at­ing,” Dan Green­haus, chief strate­gist at bro­ker­age BTIG LLC, said in a note to clients.

The ADP sur­vey cov­ers only pri­vate busi­nesses, how­ever, and fre­quently di­verges from the of­fi­cial fig­ures.

Em­ploy­ers added jobs last year at the strong­est pace in 15 years, putting 3.1 mil­lion peo­ple to work, or an av­er­age of 260,000 jobs a month. Yet hir­ing has slowed a bit in 2015, with job gains av­er­ag­ing 194,000 a month through April.

Much of that slow­down oc­curred in March, when only 85,000 net jobs were cre­ated. Hir­ing re­bounded to 223,000 in April.

The Fed­eral Re­serve is closely watch­ing the health of the job mar­ket as it con­sid­ers when to begin rais­ing the short-term in­ter­est rate it con­trols from nearly zero.

Con­struc­tion com­pa­nies added 27,000 jobs, ADP said, the most in four months. That’s a sign that de­vel­op­ers are ramp­ing up home­build­ing, an im­por­tant driver for the econ­omy.

Man­u­fac­tur­ers cut 5,000 jobs, the third straight decline. The drop in fac­tory jobs likely re­flects the im­pact of the stronger dollar, which makes U.S. goods more ex­pen­sive over­seas and cuts into ex­port sales.

Ser­vices were the main driver of job growth, adding 192,000 jobs. Those gains were led by ship­ping, re­tail, and pro­fes­sional and busi­ness ser­vices, which in­cludes higher-pay­ing in­dus­tries such as ac­count­ing and en­gi­neer­ing.

Other re­cent re­ports have painted a mixed pic­ture of the econ­omy. Con­sumers re­main cau- tious and are re­luc­tant to spend their sav­ings from lower gas prices, which are about US$1 a gal­lon cheaper than a year ago. On Mon­day, the gov­ern­ment said con­sumer spend­ing was un­changed in April. In­stead, the sav­ing rate rose to 5.6 per­cent from 5.2 per­cent.

Yet Amer­i­cans were will­ing to spend more on cars last month. Auto sales rose 2 per­cent in May to 1.64 mil­lion cars and trucks, ac­cord­ing to Au­to­data Corp. That was the fastest sales pace since July 2005.

And a sur­vey of man­u­fac­tur­ing firms showed that fac­tory ac­tiv­ity grew at a faster pace in May than the pre­vi­ous month, driven higher by more new or­ders and greater hir­ing.

Over­all, an­a­lysts ex­pect the econ­omy will ex­pand at about a 2 per­cent an­nual pace in the sec­ond quar­ter. That would leave growth in the first half of the year barely above 0.5 per­cent, down from a 3.6 per­cent pace in the sec­ond half of last year.

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