* Nonfarm payrolls seen flat in September
* Private employment likely edged up 75,000
* Unemployment rate seen rising to 9.7 pct from 9.6 pct
* Average work seen steady at 34.2 hours
By Lucia Mutikani
WASHINGTON, Oct 8 (Reuters) – The U.S. economy probably
added no jobs in September as shrinking government payrolls
offset modest gains in private hiring, an outcome that would
cement expectations of further Federal Reserve action to spur
the recovery.
The government is expected to report on Friday that private
employers added 75,000 jobs in September after an increase of
67,000 in August, according to a Reuters survey. The report is
due at 8:30 a.m. (1230 GMT).
There is a risk, however, that overall nonfarm payrolls
fell for a fourth straight month after an independent survey
this week showed a contraction in private jobs in September.
Government employment is expected to be depressed by the
termination of more temporary jobs for the decennial census and
layoffs at cash-strapped local and state governments.
In the wake of dovish speeches by senior Fed officials,
including Chairman Ben Bernanke, analysts said it was now
almost certain that the U.S. central bank would launch a second
round of asset purchases — with many expecting a move in
November — even if the jobs report surprised on the upside.
“They may delay it till December, but the odds favor we get
something. It might not be as much as the market wants, because
the economy might be doing better,” said Michael Strauss chief
economist at Commonfund in Wilton, Connecticut.
Expectations that the Fed, which has already pumped $1.7
trillion into the economy by buying mortgage-related and
government bonds, would announce a second phase of quantitative
easing at its Nov. 2-3 meeting have buoyed U.S. stocks and
prices for shorter-dated government debt and have undercut the
dollar.
The employment report will be the last before the Nov. 2
mid-term elections in which President Barack Obama’s Democratic
Party is expected to suffer large losses amid voter
dissatisfaction with the state of the economy.
Opinion polls suggest Republicans will take control of the
U.S. House of Representatives, which may give them a platform
to pursue their agenda of restricting government spending to
reduce a record budget deficit.