From wire reports WASHINGTON - Businesses added an unexpectedly large 248,000 jobs in May, according to a government report Friday that confirmed a strengthening economy that's likely to bring higher interest rates soon.
The May figure exceeded analysts' expectations for 216,000 new jobs and followed an upwardly revised 346,000 jobs added in April and 353,000 in March. But because tens of thousands of unemployed workers are renewing their search for work as the labor market improves, the overall, seasonally adjusted civilian unemployment rate did not improve from April's 5.6%. The 947,000 jobs created in the March-May period made it the strongest for any three months in four years. "These blowout numbers so far this year are the convincing evidence that the economic recovery is here to stay", said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis. "The last piece of the puzzle, jobs, has fallen into place." The cascading evidence of accelerating economic activity is certain to reinforce expectations that Federal Reserve policymakers will ratchet U.S. interest rates up from current 46-year lows when they meet June 29-30. Virtually every major sector of the economy added jobs in May, from retailing to construction. Particularly notable were 32,000 hires in manufacturing - a fourth monthly increase and biggest for any month since August 1998, when 143,000 manufacturing jobs were created, the department said. "What is really key is that every major sector had improvements", said John Silvia, chief economist for Wachovia Securities. "That suggests these gains are sustainable." Construction employment rose 32,000 in May, with 91,000 jobs added since January. In services, professional and business services added 64,000 new jobs, fueled by hiring increases in temporary employment firms. Hiring at such firms has grown by 14% since April 2003. Hotels and restaurants added 33,000 jobs over the month, and financial services boosted payrolls by 15,000. But some industries lost jobs, including telecommunications, which shed 5,000 last month. Also, there were fewer government jobs last month, as employment in that sector decreased by 27,000. Nearly 1.2 million jobs have been added since the start of the year, adding fodder for a campaigning President Bush to blunt Democratic criticisms fueled by the slow recovery from the 2001 recession. Still, the economy is far from the booming 1990s. Last month, 8.2 million people remained unemployed. While the overall jobless rate stayed at 5.6%, it was higher among blacks, at 9.9% and Hispanics, at 7%. The average duration of unemployment rose to 20 weeks last month, from 19.7 weeks in April. Almost 22% of all jobless workers have been without work for 27 weeks or more.
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