Economists: Job gains should drive the economy
WASHINGTON - Economists say the latest job gains should help drive the economy through the rest of the year.
Employers added 280,000 jobs in May, showing that the economy has regained momentum after starting the year in a deep slump. The unemployment rate ticked up to 5.5 percent from 5.4 percent in April. But that occurred for a good reason: Hundreds of thousands more people began seeking jobs in May. Not all of them found work and so were counted as unemployed.
Carl Tannenbaum, an economist at Northern Trust, says the three million people who've become employed over the past 12 months will add "a lot of spending power to the economy." He also says the rise in the number of people looking for work represents a collective vote of confidence. He says, "That suggests that those who have been on the fringes of the job market are seeing opportunities."
Construction, health care and hospitality companies drove the May job growth. On the negative side, persistently cheaper oil led energy companies to shed workers for a fifth straight month.
Average hourly wages rose 2.3 percent from a year earlier, showing some pick-up. Even so, pay is barely rising above inflation, a persistent trend that has limited the economy's growth.
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