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 The government's closely watched jobs report on Friday is expected
to show that nonfarm payrolls increased by 218,000 positions,
according to a Reuters poll of economists.
That would be a deceleration from April's outsized 288,000 job gain,
when hiring was still bouncing back from a winter lull, but it would
mark a fourth straight month with gains above 200,000 and an
important milestone in the economy's recovery.
"I would take it as a very strong reading of economic expansion,"
said Chris Rupkey, chief financial economist at Bank of
Tokyo-Mitsubishi UFJ in New York. "This is no longer a recovery in
the economy, this is an outright expansion."
At the depth of the recession, the economy had lost 8.7 million
jobs. If forecasts are on track, it finally recouped those jobs last
month.
The pace of hiring would add to data ranging from automobile sales
to services and factory sector activity that have suggested growth
this quarter will top a 3 percent annual pace.
 The economy contracted at a 1.0 percent rate in the first quarter,
dragged down by unusually harsh winter weather and a slow pace of
inventory building by businesses.
The Labor Department will release the jobs data at 8:30 a.m.
JOBLESS RATE TO TICK UP
While the unemployment rate is expected to rise to 6.4 percent from
April's 5-1/2 year low of 6.3 percent, that would reflect Americans
returning to the job hunt after dropping out of the labor market, a
sign of growing confidence in their prospects.
Economists expect more previously discouraged workers to re-enter
the labor force over the course of the year, which could slow the
decline in the jobless rate.
About 800,000 people quit the labor force in April. That pushed the
labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job, back to
the 36-year low of 62.8 percent reached late last year.
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"The message is starting to get out that job opportunities may
become more ample," said Anthony Karydakis, chief economic
strategist at Miller Tabak in New York. "We may start having some
more of the long-awaited phenomenon of people who have been
previously discouraged re-entering the labor market."
That would be welcomed by the Federal Reserve, which has cited low
labor force participation as one of the reasons for maintaining an
extraordinarily easy monetary policy.
May employment gains were likely across all sectors.
Manufacturing employment is forecast expanding for the 10th straight
month, and further increases are expected as auto sales outpace
inventories. Construction payrolls likely advanced for a fifth
month, economists said.
Sturdy job gains are also expected in retail, leisure and
hospitality, professional and businesses services, as well as
healthcare, while government payrolls probably logged a fourth
straight monthly increase.
The length of the workweek likely held steady at 34.5 hours,
according to the Reuters poll, while average hourly earnings likely
rose 0.2 percent.
(Reporting by Lucia Mutikani)
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