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Jobless Rate Expected to Rise as More Seek Work

From Bloomberg News

Economists expect the nation’s unemployment rate to tick up in June as more Americans reenter the labor market in search of jobs.

As a result, the jobless rate is forecast to rise to 6.2% in June, up from 6.1% in May.

The Labor Department is scheduled to release its monthly jobs report Thursday.

“Spending, orders and confidence are starting to return, and it won’t be long until corporations start putting people back to work,” said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York.

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The economy needs to grow at an annual rate of at least 3% before companies will be comfortable enough to hire, some economists said. Growth of 3.2% is expected for the third quarter and 3.5% for the fourth, according to the median of 57 forecasts in a survey by Bloomberg News this month.

The economy expanded at a 1.4% rate in the first quarter and may grow at 2% in the three months ending today, the survey found.

Meanwhile, U.S. manufacturing may have expanded in May for the first time since February, economists predict. The service sector, which accounts for 85% of gross domestic product, also may have strengthened. And construction spending, buoyed by record low mortgage rates, is expected to have picked up in May, according to the median estimate in a Bloomberg survey.

Here’s a summary of key business events and reports due this week:

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Today

* Final versions of Federal Communications Commission rules governing media ownership and local phone competition are expected to be released. The release of the phone rules is likely to trigger lawsuits from Baby Bells, which had a monopoly on local phone service, and action from lawmakers who have vowed to fight the measures. Lawmakers also have vowed to introduce bills to counteract the new media ownership rules.

Tuesday

* The Commerce Department releases its May construction spending report. In April, spending dropped 0.3%.

* The Institute for Supply Management issues its June manufacturing index.

Wednesday

* The Commerce Department reports May factory orders. Orders fell 2.9% in April.

Thursday

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* The Labor Department will post initial jobless claims for the week that ended Saturday in addition to its June unemployment report. Claims have declined since reaching a high in mid-April of 459,000.

* The Institute for Supply Management issues its June non-manufacturing index, which analysts expect to show improvement.


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