In news that Republicans may not like, U.S. employers added a strong 223,000 jobs in June--this puts the unemployment rate at 5.3 percent; a seven-year low. This conveys the market moving close to full health, and the Federal Reserve may start raising interest rates as soon as September. In addition, the Labor Department said that the unemployment rate dropped from 5.5 percent in May. Although, the rate fell mostly due to many out-of-work individuals who gave up as their job searches and were no longer counted as unemployed. Yet, other details were a bit less hopeful such as the percentage of Americans working or looking for work fell to a 38-year low.
Furthermore, employers added 60,000 fewer jobs in April and May than the government had previously estimated. For the first five months of 2015, monthly job growth averaged around 217,000. The job growth numbers raised economists' expectations that the Fed will soon increase the key short-term rate it controls in September or December. The Fed has kept that rate at a record low, near zero, for 6 1/2 years to help support the economy. A Fed rate hike would lead to higher rates for mortgages, auto loans and other borrowing.
These jobs gains also show that employers are increasingly confident that their customer demand will continue to grow. A survey of purchasing executives, from manufacturing firms, shows that factories had a small increase in orders for June but boosted hiring anyway. The consumer confidence index also reached 101.4, the second-highest level since the recession. Moreover, auto sales jumped to a 10-year high in May, and home sales are at an eight-year high.
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