WASHINGTON (Reuters) - Employers likely increased hiring in June, but not by enough to dispel concerns that the economy is losing steam.
Employers are expected to have added 90,000 new workers to their payrolls, according to a Reuters survey of economists. That would be tepid but still better than 69,000 jobs created in May, which was the fewest in a year.
The data could give a better read on the labor market than reports from the last six months because a mild winter may have led companies to boost hiring then at spring’s expense.
After rising by 275,000 in January, hiring has slowed in every month since February.
In June, however, economists think the weather effect played little if any role in hiring, and the payroll report could heighten concerns hiring has fallen victim to the European debt crisis, which is dulling exports and spooking financial markets.
Economists also think companies may be holding back on adding workers because of uncertainty over the U.S. government’s plans to tighten its belt next year.
“There is a general sense of slowing in the economy,” economists at Nomura said in a research note. “Instead of a temporary soft patch, this could be the beginning of a longer-lasting downshift.”
Indeed, some analysts think that pinning the hiring slowdown on the weather amounts to wishful thinking.
Economists at AllianceBernstein looked at industry-level employment data for the last six months and found little sign that construction or other weather-sensitive businesses received any boost from the balmy winter.
“Our research ... didn’t find any meaningful influence of weather patterns,” said Joseph Carson, AllianceBernstein’s U.S. economist.
The Labor Department will release jobs figures for June at 8:30 a.m. (1230 GMT) on Friday.
Even if the report meets expectations, pressure will likely grow on the Federal Reserve to do more to boost employment.
Economists expect the unemployment rate will hold steady at an elevated 8.2 percent, which is about 2 percentage points higher than the average rate over the last 50 years.
Estimates vary widely, but many analysts say the economy needs to create roughly 125,000 jobs a month to keep the unemployment rate steady.
A persistently high jobless rate also tightens a vise on President Barack Obama, who faces a tough re-election vote in November. Mitt Romney, his Republican challenger, is focusing his campaign on the weak jobs market that has plagued Obama’s presidency.
Most states phased out payments of extended jobless benefits this year, so there is a risk that some of the people cut off gave up on the job searches required to receive unemployment checks.
That would push the unemployment rate down, even though it would be bad news for the economy. Fed Chairman Ben Bernanke worries that long-term unemployed will lose their skills, reducing the country’s overall competitiveness.
Economists will keep an eye on the labor force participation rate - the share of working-age Americans who either have a job or are looking for one. The rate edged higher in May after touching a 30-year low in April.
The private sector is expected to account for all the job gains in June, adding 102,000 new positions. Government payrolls are seen dropping by 12,000, dragged down by ongoing belt-tightening by state and local governments.
Hiring in manufacturing, which until recently was the recovery’s star performer, is expected to slow.
The private Institute for Supply Management said on Monday that activity in manufacturing contracted in June for the first time in nearly three years. The ISM’s report showed employment growth slowing during the month.
In light of the high unemployment rate, average hourly earnings are seen rising a slight 0.2 percent.
With hours in most industries back to their pre-recession levels, the average workweek is seen steady at 34.4 hours. It has barely budged from this level since December.
Reporting by Jason Lange; Editing by Bob Burgdorfer