The U.S. economy probably added 250,000 jobs this month, helping fuel the income growth
that is needed to generate more spending, according to a survey of
economists ahead of a Labor Department report Friday.
The projected rise follows a 248,000 increase in May and
would bring to 1.4 million the number of jobs created this year.
Payrolls have increased for nine months, leaving 1.3 million jobs
lost since the last recession began in March 2001. The Labor
Department may also report the jobless rate held at 5.6 percent.
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“As you employ more people, those people go out and spend
and it keeps the economy humming,” said Chris Rupkey, senior
financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York.
“The jobs numbers are a necessary ingredient for healthy, well-balanced expansion.”
Federal Reserve policy-makers on Wednesday will bring an end
to the lowest interest rates since 1958 amid rising employment,
more spending and early signs of accelerating inflation, according
to economists. A separate report Thursday from the Institute for Supply Management may show a gauge of manufacturing held close to
a 20-year high this month, while the Commerce Department is
forecast to report that May personal spending rose the
most since August.
A Bloomberg survey of 134 economists shows central bankers
will boost the overnight rate by a quarter point to 1.25 percent.
The Fed has held the benchmark lending rate at 1 percent for the
last year.
“They are going to move, and they are going to move 25 basis
points,” said Laurence Meyer, a former Fed governor, in an
interview. “It’s probably one of the most telegraphed moves in
the history of central banking.”
“One percent is close to free money,” Rupkey said. “Once
jobs and the labor market are back on track, the gloves are off
for the Fed.”
Friday’s employment report will probably show a 30,000
increase in manufacturing jobs after the addition of 32,000 in
May, according to the Bloomberg survey.
Bloomberg News
