-Omair Sharif, a U.S. economist at RBS Securities Inc.
American employers increased the pace of hiring in May, as the U.S. economy weathered the impact of tax hikes and federal spending cuts, the Labor Department figures showed Friday. Payrolls in the world's largest economy rose 175,000 last month after a revised 149,000 gain in the prior month, beating analysts' expectations of a 163,000 increase. The overall unemployment rate however, rose to 7.6% compared with 7.5% in April as more people entered the labour force.
The report is adding to signs companies are more optimistic about the prospects for demand in the upcoming months even despite recent payroll-tax increase, which curbed consumer spending power. Moreover, the steady pace of hiring leaves it unclear whether Ben Bernanke should consider easing its massive bond-buying programme meant to generate faster U.S. growth. Earlier the Federal Reserve hinted that it could start to curtail its monthly purchases if the pace of hiring will accelerate in the nearest future. Nevertheless, the latest jobs report is far from conclusive, as the number of created working places over the past three months stood at 155,000, level well below the 237,000 from November through February. According to latest estimates the Fed is not considering 200,000 as the minimum average payrolls growth as a benchmark to start reducing its QE.
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