Hiring rebounded in May after a weak April, as employers made 157,000 new hires in the month, following an 80,000 gain in April, the Labor Department said today.
The increased number of Americans on the payroll helps sustain growth in the economy, but also makes it less likely that the Federal Reserve will cut interest rates, according to Bloomberg News.
“The consumer is still in a very good position,” Carl Tannenbaum, chief economist at LaSalle Bank in Chicago, said before the report. “The economy is going to perform pretty well, and that will mean stable interest rates for the balance of the year.”
Service industries, which include banking, insurance, restaurants and retailers, added 176,000 workers last month after hiring 119,000 in April, the report showed. But manufacturing payrolls fell by 19,000 last month after dropping by 20,000 a month earlier.
Personal spending rose in April, a separate government report showed today. The 0.5-percent rise in spending followed a 0.4-percent increase in March that was greater than previously estimated.
The Commerce Department said yesterday that the economy expanded at an annual rate of 0.6 percent from January through March, but a survey of economists by Bloomberg expects second-quarter growth to be 2.2 percent, with the growth rate reaching 2.8 percent by the end of the year.
And in a statement this evening, Phillip Swagel, assistant secretary of the U.S. Treasury, said: “The economy is on track to rebound in the second quarter and beyond following a slowdown of late 2006 and early this year. The strong labor market will support household spending, and this in turn will drive a continued upturn in business investment.”
