Reply #38: U.S. recovery hopes face doubts on jobs, mortgages

[Ghost Dog]

NEW YORK (Reuters) – The United States may have hit a bump on the road to economic recovery, according to data released on Wednesday, with half a million private sector jobs lost in May and mortgage applications falling last week in the face of rising interest rates.

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The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 29 decreased 16.2 percent to 658.7.

In the labor market, U.S. companies axed 532,000 jobs last month, more than economists had expected, according to ADP Employer Services. Huge job losses are unlikely to lend support to the housing market or to an economy that has been overwhelmingly driven by consumer spending in recent years. Worse yet, April's ADP figures were revised to show more job cuts than previously estimated, meaning May's job losses were smaller, but highlighting the ongoing deterioration in an economy that may have difficulty living up to expectations that it will resume economic growth in the second half of the year.

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In the services sector, the Institute for Supply Management's non-manufacturing index edged up to 44.0 in May -- its strongest since October 2008 but was still a contractionary reading at 43.7 in April.

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New orders received by U.S. factories rebounded less than expected in April, government data also showed, and the previous month's figure was revised sharply downward.

The weak economic data left Wall Street unimpressed, with U.S. stocks down more than 1.0 percent midsession (.SPX).

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