More job cuts seen in August

WASHINGTON (Reuters) - Tens of thousands more Americans likely lost their jobs last month, victims of a persistent economic slump that is taking a mounting toll on employment prospects, according to a Reuters poll.

The August employment report, scheduled for release at 8:30 a.m. EDT on Friday, is expected to underline a steady deterioration in labor markets that will cast a pall over a few recent hopeful signs of pickup.

A median forecast by 87 economists anticipates the Labor Department will report employers cut 75,000 jobs outside the farm sector in August after dropping 51,000 in July.

That would be an eighth straight month of job reductions and would bring the total so far in this presidential election year to 538,000, highlighting a rising risk of recession if consumer spending weakens sharply enough to offset the benefit from stronger exports.

The August unemployment rate is seen remaining at 5.7 percent, the same as in July.

Some recent indicators implied the economy still had some vigor, including one showing that gross domestic product which measures total national economic output had risen at a 3.3 percent annual rate in the second quarter.

In addition, new orders for long-lasting U.S. manufactured goods were strong in July and the trade deficit shrank as a weaker U.S. dollar helped push exports to record highs in June. The dollar has since gained strength against other currencies.

Analysts said they expected temporary help agencies and education and health care sectors to cut payrolls in August.

But the unemployment rate for teens is likely to drop as students return to school and even the hard-hit construction sector may be showing some signs of stabilizing.

"The construction category posted its smallest decline in nearly a year as the pace of deterioration in the housing sector may have finally begun to abate," RBS Greenwich Capital said.

A report on Wednesday from employment consulting firm Challenger, Gray & Christmas Inc. said downsizing at U.S. companies last month totaled 88,736, some 14 percent lower than a month earlier.

But that still showed a fading job market.

"We have not seen this level of summer job cutting since 2002, when the country was still struggling to recover in the wake of the 2001 recession and September 11 (attacks)," said John Challenger, chief executive officer of Challenger, Gray & Christmas, in a statement.

(Polling by Bangalore Polling Unit)

(Additional reporting by Richard Leong in New York)

(Reporting by Nancy Waitz)