Washington, Feb. 7 (Bloomberg) -- The U.S. unemployment rate held at an eight-year high of 6 percent in January as companies kept hiring in check, economists said they expect the government to report today. Payrolls probably rose 67,000 after declining 189,000 in December and November, a survey of economists found. Companies need to add 150,000 new jobs a month to push the unemployment rate down, economists said. ``The labor market is still moribund,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland. ``The apparent swing from massive payroll losses to a modest gain really belies the truth.'' The U.S. economy has shed 1.6 million jobs in the last two years, the first consecutive decrease since 1957 and 1958. Job creation is important because it generates income for consumer spending, which accounts for two-thirds of the economy. The Labor Department is to issue its monthly jobs report at 8:30 a.m. Washington time. The consensus forecast for the unemployment rate to match the 6 percent of November and December is based on the median of 64 projections in a Bloomberg News survey of economists. Along with today's report, the Labor Department is scheduled to issue its annual benchmark revisions to employment figures. The changes will take into account adjustments to seasonal variation calculations that will affect statistics back to 1998. The report will also add new information on the size of the labor force derived from the 2000 Census.
Also today, the Commerce Department at 10 a.m. Washington time will probably report that wholesale inventories rose 0.2 percent in December, the same as a month earlier, a survey of economists found. The Federal Reserve at 3 p.m. will probably report that consumer credit rose $3.5 billion in December after falling in November for the first time in almost five years, the survey found.
Retail Employment
In the employment report, the expected job gains would reflect the Labor Department's adjustments to account for seasonal variations in holiday-season retail hiring more than an absolute increase in demand for workers, economists said. Based on historical patterns, the government expects a pickup in hiring at retailers in November and December as stores gear up to accommodate the usual rush of holiday shoppers. Statisticians adjust payroll numbers down during those months to account for the seasonal fluctuation and make the figures comparable with those from other months. Because retailers last year were less optimistic about year- end sales than usual, they hired fewer workers in December than expected, resulting in a decline in the government's adjusted payroll figures. The reverse will be true for January. Because past seasonal patterns signal that retail jobs are usually lost after the holidays, a smaller-than-normal decline in the actual figures will translate into a seasonally adjusted increase in January retail employment. ``You can't fire people in January that weren't hired in the first place in December,'' said Russell Sheldon, a senior economist at BMO Nesbitt Burns in Toronto. The expected rise in payrolls last month would reflect ``technical issues'' with the way the government makes its statistical adjustments, he said. At the same time, some evidence is emerging that the worst of the job losses may be over, economists said. First-time claims for state unemployment insurance averaged 384,000 a week in January, down from 420,000 the previous month. The number of people remaining on unemployment insurance rolls fell to an average of 3.32 million last month from 3.45 million in December, according to government figures.
Jobs Hard to Get
Americans are beginning to notice an improvement. The percentage of consumers last month who said jobs were hard to get fell to 28.8 from 29.7 in December, according to a report last week by the Conference Board, a New York-based research group. The December rate was the highest since October 1994. An index of employment among non-manufacturing businesses showed companies expanded payrolls in January for the first time in almost two years, according to the Institute for Supply Management. The employment index published by the institute, which represents industrial purchasing managers, rose to 50.3 last month from 46.9 in December. A number greater than 50 signals growth. Still, hiring isn't expected to accelerate until more is known about the prospect of war with Iraq, Federal Reserve policy makers and economists said. ``Geopolitical risks have reportedly fostered continued restraint on spending and hiring by businesses,'' central bankers said last week in announcing that they were holding their benchmark target interest rate at a 41-year low. As those risks abate, already-low interest rates and growth in productivity ``will provide support to an improving economic climate over time,'' the Fed said. Some companies are still cutting jobs to hold down costs amid a sluggish economy. Bank of America Corp., the third-largest U.S. bank, said it will fire about 1,000 technology and operations workers in the first quarter to help meet cost-cutting targets, according to company spokeswoman Lisa Gagnon. The cuts follow the elimination of about 900 technology and operations jobs in November and December. ``Economic conditions continue to be challenging,'' said Gagnon, in an interview. The bank has already cut about 225 jobs in January. //www.quote.bloomberg.com