By Shobhana Chandra
Sept. 5 (Bloomberg) -- The U.S. probably lost jobs in August for an eighth consecutive month, raising the risk that growth will falter in the second half of the year, economists said before a government report today.
Payrolls fell by 75,000 after declining by 51,000 in July, according to the median estimate of 76 economists in a Bloomberg News survey before the Labor Department report. The unemployment rate likely stayed at a four-year high of 5.7 percent.
Mounting job cuts will add to the woes of Americans facing lower home values, scarcer credit and higher prices. Staff reductions at companies from UAL Corp. to Gannett Co. threaten to further weaken consumer spending, the biggest part of the economy, and reinforce concern that the expansion will end.
``The labor market pretty much hit the skids in August,'' said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. ``The weakness we're likely to see in the jobs numbers dovetails with other reports that suggest the economy took a downward lurch in the second half.''
The Labor Department will report payrolls at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from declines of 30,000 to 150,000. Estimates for the unemployment rate ranged from 5.5 percent to 5.9 percent.
Factory payrolls fell by 35,000, the survey median showed.
Auto, Airline Jobs
High costs and slowing sales plagued carmakers and airlines. General Motors Corp., the biggest U.S. automaker, is offering early-retirement incentives to about 9,000 U.S. salaried workers, people familiar with the plan said in August. UAL's United Airlines, the world's second-largest carrier, will shed 1,550 flight-attendant jobs to help stem losses.
The projection for today's jobs report would bring the total decline in payrolls so far this year to more than half a million. The economy created 1.1 million jobs in 2007.
Employment is among the indicators tracked by the National Bureau of Economic Research, the official arbiter of U.S. economic cycles, in calling a recession. The others are sales, incomes, production and gross domestic product.
The group defines a recession as a ``significant'' decrease in activity over a sustained period of time, and usually takes six to 18 months to make a determination.
Job losses are one reason economic growth will soften after a second-quarter rate of 3.3 percent. The economy may expand at an average 0.7 percent annual pace from July through December, according to the median forecast in a Bloomberg survey.
Consumer Spending
Consumer spending, which accounts for more than two-thirds of the economy, in July posted the biggest drop in four years after inflation.
``The pace of economic activity has been slow in most districts,'' the Federal Reserve said in its Beige Book report this week. There's ``a general pullback in hiring.''
The economy ``is close to stagnating,'' Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, said in an interview with Bloomberg Radio. In part because of continued gains in worker productivity, employers will keep cutting jobs, sending the U.S. unemployment rate to 6.75 percent next year, he said.
Goldman economists project a 100,000 decline in payrolls for August, with the unemployment rate rising to 5.8 percent.
Merrill Lynch & Co., the U.S. securities firm trying to restore profitability after four straight quarterly losses, in August imposed a freeze on new hires through the end of 2008.
Waning advertising sales led publishers to trim costs. Gannett Co., the largest U.S. newspaper publisher, in August said it will shed about 1,000 positions. McClatchy Co., which owns the Miami Herald and already is cutting its workforce by 10 percent, said it will freeze wages for a year starting Sept. 1.
Housing-related job cuts continue. Progress Energy Inc., the owner of utilities in three U.S. southeastern states, said it will cut about 300 positions by year-end at its Florida unit as an increase in vacant homes slowed demand.
``The difficult economy is taking a toll on companies all around the country and is particularly affecting our company in Florida,'' Jeff Lyash, chief executive officer of Progress Energy Florida, said in a statement on Aug. 28.
Bloomberg Survey
=============================================
Nonfarm Unemploy
Payrolls Rate
,000's %
=============================================
Date of Release 09/05 09/05
Observation Period Aug. Aug.
---------------------------------------------
Median -75 5.7%
Average -77 5.7%
High Forecast -40 5.9%
Low Forecast -150 5.5%
Number of Participants 76 74
Previous -51 5.7%
---------------------------------------------
4CAST Ltd. -70 5.7%
Action Economics -70 5.7%
Aletti Gestielle SGR -65 5.8%
Argus Research Corp. -40 5.5%
Banc of America Securitie -70 5.7%
Bancolombia SA -82 5.8%
Bank of Tokyo- Mitsubishi -71 5.8%
Bantleon Bank AG -100 5.7%
Barclays Capital -75 5.8%
BBVA -65 5.7%
BMO Capital Markets -80 5.8%
BNP Paribas -90 5.8%
Briefing.com -60 5.7%
CIBC World Markets -80 5.8%
ClearView Economics -50 5.6%
Commerzbank AG -75 5.8%
Credit Suisse -50 5.7%
Daiwa Securities America -90 5.8%
Danske Bank -90 5.7%
DekaBank -50 5.7%
Desjardins Group -85 5.7%
Deutsche Postbank AG -60 5.7%
Dresdner Kleinwort -110 5.8%
DZ Bank -50 5.7%
First Trust Advisors -75 5.8%
Fortis -60 5.7%
FTN Financial -65 5.7%
Global Insight Inc. -90 5.7%
Goldman, Sachs & Co. -100 5.8%
H&R Block Financial Advis -65 5.7%
Helaba -100 5.7%
Horizon Investments -55 5.7%
HSBC Markets -90 5.9%
IDEAglobal -85 5.7%
Informa Global Markets -40 5.7%
ING Financial Markets -150 5.8%
Insight Economics -75 5.8%
Intesa-SanPaulo -75 5.7%
J.P. Morgan Chase -100 5.8%
Janney Montgomery Scott L -50 5.8%
JPMorgan Private Client -75 5.7%
Landesbank Berlin -80 5.8%
Landesbank BW -90 5.8%
Lehman Brothers -100 5.7%
Lloyds TSB -60 5.8%
Maria Fiorini Ramirez Inc -70 5.7%
Merk Investments -75 5.8%
Merrill Lynch -140 5.8%
MFC Global Investment Man -100 5.8%
Moody's Economy.com -70 5.8%
Morgan Keegan & Co. -103 5.7%
Morgan Stanley & Co. -75 5.8%
National Bank Financial -80 5.8%
National City Corporation -121 5.7%
Natixis -90 5.8%
Newedge -46 5.7%
Nomura Securities Intl. -75 5.7%
Nord/LB -60 5.7%
PNC Bank -45 5.8%
RBS Greenwich Capital -60 5.7%
Ried, Thunberg & Co. -75 5.9%
Schneider Trading Associa -118 ---
Scotia Capital -90 5.8%
Societe Generale -85 ---
Stone & McCarthy Research -60 5.8%
TD Securities -50 5.7%
Thomson Financial/IFR -65 5.8%
Tullett Prebon -75 5.7%
UBS Securities LLC -80 5.8%
Unicredit MIB -60 5.6%
University of Maryland -65 5.7%
Wachovia Corp. -97 5.7%
Wells Fargo & Co. -70 5.7%
WestLB AG -75 5.7%
Westpac Banking Co. -60 5.7%
Wrightson Associates -75 5.9%
=============================================
To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net
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