The survey began in mid-May and ended on June 3, the day the government released the May jobs report, which showed a steep pullback in hiring. The unemployment rate rose to 9.1 percent.
ManpowerGroup, one of the nation's largest staffing companies, said employers are likely to hire at a modest pace through the summer. That's an improvement since the recession but hiring hasn't returned to levels consistent with a healthy economy.
Business added to their stockpiles for the 16th straight month in April, another sign that companies are confident that consumers will spend more in the second half of the year.
The Commerce report did show that the pace in which businesses sold those goods in April fell to the slowest in 10 months. But economists said the decline in sales growth was not a concern because the ratio of inventories to sales remained at historically low levels in April. That means companies are unlikely to get stuck with huge stockpiles of goods.
The retail sales report highlighted other areas of weakness in the economy. Sales at department stores and big general merchandise stores such as Wal-Mart and Target edged down 0.1 percent in May. Many of the nation's big retail chains reported shoppers pulled back on such as clothing and home goods.
Sales also fell at furniture stores and electronics and appliance stores. Those declines probably reflected the weakness in the housing market.
Economists surveyed by The Associated Press now believe the economy will show only a modest growth pickup in the current April-June quarter. They forecast growth at an annual rate of 2.3 percent. That would be only a slight improvement from the lackluster 1.8 percent growth in the January-March quarter.
Copyright 2011 The Associated Press.