US jobless rate rise as companies curbed hiring
Unemployment probably rose from a three-year in low in October as U.S. employers curbed hiring on concern growth will suffer if lawmakers fail to avert tax increases and spending cuts slated to take effect next year, economists said before a report today. "We're adding enough jobs to tread water but not to make much progress in bringing down the slack that remains," said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama. "The labor market is consistent with the middling growth we've seen in the overall economy."
Employers have little reason to boost staff as global demand slows and the so-called fiscal cliff of tax increases and spending cuts raise the risk the expansion will sputter next year. The report comes before Americans go to the polls on Nov. 6 to decide whether to give President Barack Obama another four years or change course with Republican challenger Mitt Romney.
The Labor Department's figures will be issued at 8:30 a.m. in Washington. Payroll projections in the Bloomberg survey ranged from gains of 30,000 to 154,000. An average of 146,000 jobs a month were added in the third quarter.
Forecasts for the unemployment rate ranged from 7.7 percent to 8 percent. The unemployment rate in September matched the level when Obama took office in January 2009. It exceeded 8 percent for 43 months prior to September, the longest such stretch since monthly records began in 1948.
The most recent polls suggest the race for the presidency is in a dead heat. The Washington Post/ABC News national tracking poll released Oct. 31 showed Romney and Obama tied at 49 percent among likely voters. An aggregation of national polls compiled by the website RealClearPolitics also showed a tied race, with each candidate at 47.4 percent.
Ronald Reagan is the only president to have been re-elected since World War II with a jobless rate above 6 percent. The rate was 7.2 percent on Election Day 1984, having dropped almost 3 percentage points in the previous 18 months. Assuming the rate is 7.9 percent in October this year, the rate would have dropped 1.1 points in the same period under Obama.
While torn about who will be president, Americans have grown more optimistic about the US economy, an indication the labor market may be improving for some.