<No.588> |
Prospects Grow for Earlier Fed Rate Hike as US Adds Jobs |
|
Job gains last month beat expectations
by more than 50,000.
And aside from losses in the energy sector,
gains were across the board,
says PNC Financial Services senior economist Gus Faucher on Skype.
"We had strong growth in retail trade
and leisure, hospitality services,
education and health care,
business and professional services, construction,
and then we also saw a pick-up
in job growth in manufacturing."
The pick-up in manufacturing is notable,
given the recent weakness in exports -
a byproduct of a stronger dollar
which has made American-made goods more expensive abroad.
The other notable development
is a steady improvement in wages.
Ethan Harris is head of global economic research
at Bank of America Merrill Lynch.
"Normally workers start to get a little bit of bargaining power
as they get a fully healthy job market.
That's been delayed
because the recovery was so slow.
But now we're finally there.
We're finally seeing workers.
We're on the cusp."
But a healthy labor market also puts the prospect
of an interest rate hike this year
back on the table.
Some economists had urged the central bank
to delay raising rates until next year
after government reports showed
the U.S. economy shrank in the first quarter.
Solid job growth in May could prompt the Fed
to act sooner,
says Bankrate.com Washington bureau chief Mark Hamrick.
"Our own Bankrate quarterly economic survey finds that
the vast majority of our panel members believe that
the Fed will be raising interest rates in September."
Members of the Federal Reserve Open Market Committee
could signal their intentions
after the board's next meeting
later this month.
Mil Arcega, VOA News, Washington |
|
|
|