WASHINGTON (Reuters) – U.S. employers added a larger-than-expected 248,000 jobs in May, according to a government report on Friday that confirmed a strengthening economy is likely to usher in higher interest rates.
The May tally by the Labor Department exceeded Wall Street expectations for 216,000 new jobs and followed an upwardly revised total of 346,000 jobs in April and 353,000 in March. The 947,000 jobs created in the March-May period make it the strongest three-month stretch in four years.
Cascading evidence of accelerating economic activity is certain to reinforce expectations that Federal Reserve policy-makers will ratchet up U.S. interest rates from current 1958 lows when they meet June 29-30 and may prove a boon to election-bound President Bush.
“Clearly, the jobless recovery is behind us,” said economist Gary Thayer of A.G. Edwards and Sons Inc. in St. Louis, Mo. “The economy probably does not need as much stimulus … so the Fed is likely to start raising rates soon.”
The unemployment rate remained at 5.6 percent in May, unchanged from April.
JOY IN WHITE HOUSE
Treasury Secretary John Snow said the rising job count “demonstrates, beyond a doubt, the broad-based strength and continuing momentum of the U.S. economy.”
But prospective Democratic presidential nominee, Sen. John Kerry, issued a statement saying America “is still in the worst job recovery since the Great Depression” and promised to end tax breaks for companies that send jobs outside the United States.
Virtually every major private sector of the economy added jobs in May, from retailing to construction industries. There was a dip in government employment.
Particularly notable were 32,000 new hires in manufacturing — a fourth straight monthly increase and the biggest for any month since August 1998 when 143,000 manufacturing jobs were created, the department said.