Futures Higher Ahead of May Jobs Report

By Sara Lepro

NEW YORK -- U.S. stock futures are higher as investors anxiously await the government's tally on job losses in May for evidence on whether the economy is healing.

The advance in U.S. futures came amid gains in overseas markets as investors cheered Rio Tinto's (RTP Quote) decision to scrap a $19.5 billion deal with China's Chinalco(ACH Quote). Instead, the massive mining company has opted to raise money through a stock sale and set up a joint venture with rival mining company BHP Billiton(BHP Quote).

In the U.S., investors are focused on jobs as the Labor Department is set to release its unemployment report for May at 8:30 a.m. EDT.

Economists are expecting the government to report that 520,000 jobs were lost in May, on top of the 5.7 million jobs that have been lost since the recession began in December 2007. If they are right, it would be the second month in a row that job losses slowed, and the fewest number of job cuts since October.

Investors are hopeful that the number will prove unemployment is stabilizing, especially after they got a pleasant surprise on the jobs market Thursday. The government reported that the number of workers continuing to receive unemployment benefits unexpectedly dropped for the first time in 20 weeks. Initial claims for unemployment benefits also declined.

Unemployment has been one of the most closely watched gauges of the economy's health throughout the recession. Rising job losses affect vast areas of the economy, including consumer spending, retail sales and the housing market.