By Joshua Newell

WASHINGTON (MNI) – The U.S. non-farm payrolls report is expected to
show somewhat lower job growth in January, as temporary positions
associated with shipping and delivery services declined post-holidays,
according to economists with forecasts of the report due out Friday.

A survey of economists by Market News International showed the
consensus if for payrolls are forecast to grow by 130,000, down from
200,000 the previous month.

Economists are generally expecting a drop of approximately 40,000
shipping jobs now that the busy holiday season is over. However once
this is factored in, the payrolls number is expected to show growth
closer to the trend-line of 200,000. Generally, payroll growth of more
than 200,000 is the number at which the economy nets employment growth.

Credit Suisse Economics Director Jonathon Basile told MNI in a
telephone interview, “Payrolls ex-couriers are expected to be on trend.
We are not adding jobs too fast right now, but we are in the midst of
seasonal noise. Overall, we are not in an environment conducive to
strong job growth.”

Action Economics Chief Economist Michael Englund noted issues with
the December seasonals which is why he also expects a decline in
shipping service jobs in January.

“The seasonal adjustments can’t keep up with the increase in
internet shopping around the holidays,” Englund said.

The decent rise in payrolls follows several other employment
releases that show moderate growth. Weekly jobless claims have been
below 400,000 for two months, and the four-week moving average fell to
377,000 last week, a sign the employment situation could be improving.

The ADP National Employment report showed that the private sector
added 170,000 jobs in January, slightly below expectations and 120,000
below December’s number. Economists expect the non-farm payrolls report
to show a 150,000 rise in private payrolls for January.

When asked about the status of private sector job growth, ClearView
Economics President Kenneth Mayland told MNI, “Manufacturing is up
modestly; the production side of economy is doing well, but the demand
side isn’t buying.”

Englund said this expected growth in manufacturing should be due to
an increase in vehicle assembly production, “consistent increased
activity due to lost (vehicle) production in southeast Asia in Q4.”

Englund also pointed to the mild winter as a catalyst for job
growth, saying, “Better than expected weather translates to more
temporary construction and mining jobs as well as service sector jobs
providing support. These people are normally not working much in
January.”

The ISM manufacturing report supported this, as the employment
index fell slightly but remained above 50, showing continued expansion
in the manufacturing sector.

Still, Basille points out that we are still experiencing sub-par
growth, calling it “growth without prosperity.”

“Payrolls are not growing fast enough to push the unemployment rate
down much,” Basile said.

The unemployment rate is projected to remain unchanged at 8.5%,
after declining the previous two months.

Mayland cautioned against looking too much into any possible swings
in the unemployment rate.

“The continued decline of the participation rate is a curious thing
and is something to watch as we go forward this year,” Mayland said.

A sharp increase in the participation rate can hold the
unemployment rate steady or cause an increase, even as large amounts of
jobs are being added.

The Bureau of Labor Statistics will released the January non-farm
payrolls report Friday at 8:30 AM ET.

–Joshua Newell is a reporter for Need to Know News.

** Market News International Washington Bureau: 202-371-2121 **

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