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Solid Hiring Expected for June         07/02 06:07

   U.S. employers likely hired at another strong pace in June, a sign that the 
job market is nearing full health and giving the Federal Reserve reason to 
raise interest rates as early as September.

   WASHINGTON (AP) -- U.S. employers likely hired at another strong pace in 
June, a sign that the job market is nearing full health and giving the Federal 
Reserve reason to raise interest rates as early as September.

   Economists predict that employers added 233,000 jobs and that the 
unemployment rate dipped to 5.4 percent from 5.5 percent in May, according to 
data firm FactSet.

   The June employment report will be released at 8:30 a.m. Eastern time 
Thursday.

   For the first five months of 2015, monthly job growth has averaged 217,000, 
a healthy streak that is steadily absorbing the unemployed as well as part-time 
workers looking for more hours.

   The job gains are also showing tentative signs of finally forcing up wages, 
which have remained stagnant for many Americans during the 6-year-old economic 
recovery. Pay is now rising for some because employers have been forced to 
offer higher wages to attract qualified employees.

   Those trends have raised economists' expectations that the Fed will soon 
raise the key short-term rate it controls in September or, if not, in December. 
The Fed has kept that rate at a record low near zero for 6 years to support 
the economy. A Fed rate hike would lead to higher rates for mortgages, auto 
loans and other borrowing.

   In May, many more Americans started seeking work. Even though employers 
added a robust 280,000 jobs in May, they weren't enough to fully absorb the 
influx of job seekers. As a result, the unemployment rate rose a notch to 5.5 
percent.

   Still, a surge in people looking for work is a healthy sign because it 
suggests rising optimism about job prospects. Assuming that most of the new job 
seekers eventually find work, the rise in employment levels should eventually 
accelerate consumer spending and economic growth.

   Strong hiring has endured this year despite a miserable winter, which helped 
cause the economy to contract 0.2 percent at an annual rate in the 
January-March quarter.

   Patrick O'Keefe, an economist at the accounting and consulting firm 
CohnReznick, says the job gains show that employers are increasingly confident 
that their customer demand will keep growing. Their willingness to hire in 
anticipation of greater demand marks a shift from earlier in the economic 
recovery, when many businesses tended to hire only when essential.

   "They've gone from being reactive, where they would hire only after their 
current workforce was maxed out, to anticipatory," O'Keefe said. "They need 
more employees to keep up with future demand."

   A survey of purchasing executives at manufacturing firms released Wednesday 
echoed that view: It found that factories reported a scant rise in orders in 
June but ramped up hiring anyway. Bradley Holcomb, chairman of the Institute 
for Supply Management's manufacturing business survey committee, said that 
trend shows that manufacturers foresee orders rising in coming months.

   Americans are finally spending more after boosting their savings earlier 
this year, in part because they're growing more confident about the economy. 
The Conference Board said Tuesday that its consumer confidence index reached 
101.4, matching March's figure for the second-highest level since the recession.

   That's good news for auto dealers and real estate agents. Auto sales jumped 
to nearly a 10-year high in May. The National Automobile Dealers Association 
forecasts that sales will top 17 million this year for the first time since 
2001.

   And home sales are running at an eight-year high and boosting construction. 
Permits to build homes jumped 11.8 percent in May to the highest level since 
2007.

   Most economists now expect economic growth to reach an annual rate of 2.5 
percent in the April-June quarter and 3 percent in the second half of the year.


(KA)


 
 
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