Recovery: US jobs gain in May despite austerity

WASHINGTON: The United States economy continued to add jobs in May at a moderate pace despite worries that the government’s sequester spending cuts would cause private businesses to slow hiring.

The 175,000 net new jobs added last month confirmed that the economy continues to grow steadily if not spectacularly. Analysts said the numbers were better than expected and could, but others had doubts the pace would be sustained, saying that the sequester cuts would increasingly show up in slower business activity and pointing out that new jobs were still largely in low-paying fields. “May’s larger-than-expected non-farm employment gain did little to dispel the notion that economic activity is decelerating in the second quarter,” said Wells Fargo Securities in a research note. Markets were split in their reaction. Bond prices sank and yields jumped as investors saw it as confirming expectations of Fed tightening, and the dollar gained as well.

Published in The Express Tribune, June 9^th, 2013.

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