Text 14394, 118 rader
Skriven 2005-08-05 19:06:00 av Jeff Binkley (1:226/600)
Ärende: Economy
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More bad news for the democrats...  Bush said this would happen.
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http://biz.yahoo.com/ap/050805/economy.html?.v=19

AP
Employers Add Over 200,000 Jobs in July
Friday August 5, 5:18 pm ET 

By Jeannine Aversa, AP Economics Writer  
Employers Add More Than 200,000 Jobw in July, Most Since April; 
Unemployment Remains 5 Percent 


WASHINGTON (AP) -- U.S. employers cranked up their hiring in July, 
adding more than 200,000 jobs in a summertime show of confidence in the 
economy's staying power. The unemployment rate held steady at 5 percent.

 
 
The report released by the Labor Department on Friday raised hopes that 
job opportunities will continue to expand in the months ahead.

The 207,000 increase in payroll jobs last month -- the most since April 
- reflected hiring across a range of industries. Retailing, health care,
financial activities and construction all expanded employment. But 
factories shed jobs for the second month in a row.

"Once skittish businesses are turning into confident businesses that are
willing and able to hire," said Mark Zandi, chief economist at 
Economy.com. "I think the job market will improve further in the course 
of the coming year."

As the labor market gained traction, workers' wages also went up.

Employees' average hourly earnings rose to $16.13 in July. That was 0.4 
percent more than the $16.07 in June. The increase was the most in a 
year. Average weekly earnings climbed to $543.58 in July, up from 
$541.56 in June.

While wage growth is good for workers, the increase was worrisome to 
investors and some economists who fret about inflation pressures picking
up.

On Wall Street, the Dow Jones industrials lost 52.07 points to close at 
10,558.03.

To keep inflation in check, the Federal Reserve is expected to raise 
short-term interest rates by one-quarter of a percentage point when it 
meets Tuesday. It would be the 10th such increase since the central bank
began tightening credit in June 2004.

Fed Chairman Alan Greenspan has said the central bank would keep close 
watch for signs of inflation, especially any from the compensation 
front.

Analysts pointed to the growth in jobs and in earnings as raising the 
odds that the Fed will extend its credit-tightening campaign well into 
2006 to thwart inflation. If wages keep on rising at the pace seen in 
July, the Fed might opt for a bolder, half-point rate increase later 
this year, some economists said.

"What needs to be watched is the wage situation," said Joel Naroff of 
Naroff Economic Advisors. "Was the jump in wages a one-shot wonder or 
does it portend accelerating labor costs? That is the unknown right 
now."

On a positive side, analysts said the pickup in wages should help 
support consumer spending, the economy's lifeblood, in the months ahead.

On the payroll front, employers added 42,000 more jobs in May and June 
combined than the government previously thought -- figures that 
heartened economists.

So far this year, the economy is adding an average of 191,000 jobs a 
month. That is better than the average of 183,000 a month registered 
last year.

The payroll performance in July exceeded economists' expectations. They 
were predicting a gain of 180,000 positions and expected the jobless 
rate to hold steady at 5 percent, close to a four year low.

The labor market is the one part of the economy that has had difficulty 
getting back to full health after the 2001 recession. Rather than ramp 
up hiring, companies had relied largely on squeezing more productivity 
out of existing workers to meet customers' demand.

During President Bush's first term, the economy created just 119,000 net
new jobs. So far in his second term, the economy already has created 
more than 10 times that number.

"Now companies are convinced that the expansion is getting stronger and 
is sustainable and they are increasing hiring to meet expected demand," 
said Anthony Chan, senior economist at JP Morgan Asset Management.

The economy grew at a 3.4 percent pace in the second quarter and is 
expected to clock in at a 4 percent pace or higher in the July-to-
September period.

"The economy has finally transitioned to another phase, a phase where 
the combination of sustained economic growth along with stronger 
business confidence will produce a steady creation of 200,000 positions 
per month," predicted Ken Mayland, president of ClearView Economics.

The Bush administration pointed to the employment report as evidence the
economy is on a healthy growth path. But Democrats questioned whether 
hiring gains will be sustained and said the labor market climate can 
still be tough for some people.

The report showed that the average time that the 7.5 million unemployed 
spent searching for work in July was 17.6 weeks, up from 17.1 weeks in 
June.

Surging energy prices, meanwhile, also can strain pocketbooks. Oil 
prices climbed to a new closing high of $62.31 a barrel on Friday.

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