Higher Jobless Numbers Predicted for May
The U.S. economy is expected to have lost more jobs in May, which may give Federal Reserve policymakers reason to lower interest rates further, analysts are predicting. On Friday, the Labor Department will report on U.S. unemployment for May.
A survey of economists by Bloomberg News forecast that the rate rose to 4.6% last month, or that 50,000 jobs were lost. That would follow a decline of 223,000 positions in April, when the rate stood at 4.5%. Payrolls haven’t been reduced by that much since a net 259,000 people were put out of work in February 1991, during the last recession.
Federal Reserve Chairman Alan Greenspan indicated in a speech last week that the central bank is prepared to reduce the overnight bank lending rate again to sustain the record economic expansion, which began a decade ago. More shrinkage in the job market would concern policymakers, analysts said.
Also on Friday, the National Assn. of Purchasing Management is expected to report a 10th consecutive month of decline for manufacturing. A May reading of 43.7 is likely. Though that’s higher than the 43.2 registered in April, any reading below 50 suggests a decline.
A regional report Thursday from the Chicago purchasing managers is likely to show similar results.
* Tuesday, the Conference Board will probably show its index of consumer confidence increased to 111 in May from 109.2 during April, analysts said.
* Tuesday, the Commerce Department is expected to show that personal spending rose 0.4% in April after increasing by 0.3% during March, analysts said. Personal income is likely to have risen by 0.3% in April after a 0.5% gain during March, analysts said.
* Thursday, the Labor Department’s report on first-time claims for state unemployment benefits will probably show an increase of 1,000 in the week ended May 26 to 408,000, analysts said. Claims reached a five-year high of 425,000 during the week ended April 28.
* Friday, the Commerce Department will report on construction spending during April, which is likely to have risen 0.2% after rising 1.3% during March.
