American employers probably failed to create enough jobs in July to reduce the jobless rate, showing anxiety over government debt deliberations and a slowdown in consumer spending have shaken confidence, economists said before a report today.
Payrolls climbed by 85,000 workers after an 18,000 increase in June that was the smallest this year, according to the median forecast of 88 economists surveyed by Bloomberg News before a Labor Department report. The jobless rate held at 9.2 percent after rising in each of the previous three months.
Limited job gains and concern the economic recovery will be cut short led U.S. equities to their biggest slump since February 2009 yesterday. Slowing growth puts more pressure on Federal Reserve policy makers meeting next week to try to steer the world’s largest economy away from another recession at a time when inflation is also accelerating.
“The labor market is slowing towards stall speed,” said Patrick O’Keefe, chief economist at J.H. Cohn LLP in Roseland, New Jersey. “Employers were certainly seeing a decline, or leveling off, in demand for goods and services.”
The Labor Department’s data are due at 8:30 a.m. in Washington. Bloomberg payroll survey estimates range from no change to a 150,000 increase.