Business Blog Posts

The government is expected to report on Friday that private employers added 75,000 jobs in September after an increase of 67,000 in August, according to a Reuters survey. The report is due at 8:30 a.m. EDT.

There is a risk, however, that overall nonfarm payrolls fell for a fourth straight month after an independent survey this week showed a contraction in private jobs in September.

Government employment is expected to be depressed by the termination of more temporary jobs for the decennial census and layoffs at cash-strapped local and state governments.

In the wake of dovish speeches by senior Fed officials, including Chairman Ben Bernanke, analysts said it was now almost certain that the U.S. central bank would launch a second round of asset purchases -- with many expecting a move in November -- even if the jobs report surprised on the upside.

"They may delay it till December, but the odds favor we get something. It might not be as much as the market wants, because the economy might be doing better," said Michael Strauss chief economist at Commonfund in Wilton, Connecticut.

Expectations that the Fed, which has already pumped $1.7 trillion into the economy by buying mortgage-related and government bonds, would announce a second phase of quantitative easing at its November 2-3 meeting have buoyed U.S. stocks and prices for shorter-dated government debt and have undercut the dollar.

The employment report will be the last before the November 2 mid-term elections in which President Barack Obama's Democratic Party is expected to suffer large losses amid voter dissatisfaction with the state of the economy.

Opinion polls suggest Republicans will take control of the U.S. House of Representatives, which may give them a platform to pursue their agenda of restricting government spending to reduce a record budget deficit.

SIGNS OF IMPROVEMENT

The recovery from the longest and deepest downturn since the 1930s has been too slow to generate jobs, but the labor market is beginning to show some improvement.

First-time applications for unemployment benefits have dropped from a nine-month high touched in mid-August and some surveys have suggested a pick-up in demand for labor.

In addition, the government last month revised payrolls data for June and July to show fewer job losses, and analysts will be watching to seen if the trend continued in August.

"More jobs than people realize are being created," said Brett D'Arcy chief investment officer at CBIZ Wealth Management in San Diego, California.

"This recovery, although a longer recovery, is following the traditional steps of how a recovery happens. We are at the point where we should and probably will see some fairly strong job creation."