June auto sales, jobs data expected to show U.S. economy rebounding

http://feeds.reuters.com/~r/reuters/businessNews/~3/QSuzfGyv2sE/story01.htm (Reuters) - The United States can firmly consign its weather-beaten start to the year to history this week with June vehicle sales and jobs data expected to show a strong end to the second quarter.

The U.S. economy contracted at a 2.9 percent annual rate, the sharpest decline in five years, in the Jan-March period, figures showed last Wednesday.

An exceptionally bitter winter, the expiration of long-term unemployment benefits and a marked slowdown in restocking by businesses combined to drag down the world's largest economy, but these factors should have faded by April.

Monthly jobs data, arguably the most important gauge for both the Federal Reserve and the American people, is expected to show U.S. firms are continuing to hire at a solid pace as a virtuous circle of economic activity and growth takes hold.

U.S. employment already returned to its pre-recession peak in May, with non-farm job gains of 217,000. Economists polled by Reuters on average expect that to dip by a modest 4,000 to 213,000 in June.

That would be a fifth straight month of job gains above 200,000, a run unmatched since the Sept 1999-Jan 2000 period, just before the dot-com bubble burst.

"If we settle at a 215-220 (thousand) pace that would be consistent with a transition to a faster pace of growth of around 3 percent," said Lewis Alexander, U.S. chief economist at Nomura.

Alexander said he recognized risks, including rising oil prices from the conflict in Iraq and Iraqi conflict and a possible messy end to China's housing boom.

"An impact is possible, but I don't think all that likely. It would have to go very badly to materially impact the U.S. outlook," he said.

The jobs figures on Thursday, also set to feature a steady 6.3 percent unemployment rate, will conclude a shortened week for the United States, which breaks for Independence Day on Friday.

The week will also feature auto sales, seen pulling back slightly in June after surging in May by its strongest pace since February 2007.

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