Little change is expected in Friday’s jobless report, experts say

A drop in the number of jobless claims since June has raised hopes that the U.S. jobs situation is showing modest signs of improvement.

But with the government’s monthly unemployment report due Friday, many economists believe that the unemployment rate of 8.2 percent is unlikely to change much.

After three straight months of disappointing job growth, many analysts are expecting payrolls in the United States to have jumped by roughly 100,000 in July.

If so, that’s a faster rate of growth than was recorded in April, May or June.

Since the labor force is growing about the same rate as payrolls, however, little change in the rate of unemployment is expected.

“It just looks like we’re moving sideways,” said Paul Ashworth, chief U.S. economist for Capital Economics. “It’s not going up, but then again it’s not going down.”

Whatever the numbers on Friday, they will be subject to immediate scrutiny by both sides in the presidential race.

The campaign of Republican Mitt Romney is depicting the U.S. economy as severely troubled.

“The economy is not just downshifting,” Romney senior adviser Eric Fehrnstrom told reporters on a conference call. “It is slipping into reverse.”

President Obama has shrugged off such analyses and derided Romney’s approach, calling it “top down economics.”

“The basic idea is, is that if you give more tax breaks to the very wealthy, and you get rid of regulations on banks and polluters and health insurance companies, then somehow everybody is going to prosper,” Obama told a crowd in Akron, Ohio, this week.

Given the government budget conflicts and the recession in Europe, the lackluster state of the U.S. economy seems likely to persist, economists said, and keep the economy in the doldrums.

“These factors will be with us for quite a while,” Ashworth said.

The anticipation of figures showing stronger job growth for July arises because the number of initial jobless claims has dropped from June to July.

A month ago, the initial jobless claims were averaging more than 386,000. That has come down to 365,500, according to Labor Department data. In addition, private payroll surveys have shown some signs of strength.

“If the job growth is above 100,000, it’s better news than what we’ve had,” said Gus Faucher, senior macro economist at PNC Financial Services Group. “It would appear that the slow patch we’ve had since April is over.”

A disappointing jobs report, however, could motivate the Federal Reserve to act soon to stimulate the flagging recovery. So far, investors have been disappointed with the lack of strong action from central bankers as the global economy has slowed.

On Thursday, stock indexes slid for the fourth consecutive session. The sell-off was sparked after European Central Bank President Mario Draghi unveiled efforts to lowering borrowing costs of stressed euro-zone nations. The move failed to impress investors.

The Dow Jones industrial average fell 0.7 percent to close at just under 12879. The Standard & Poor’s 500-stock index closed at 1365, also 0.7 percent lower.

Factory orders also fell more than expected in June, another sign that the tepid recovery is discouraging businesses. Economists expected a 0.5 percent increase in orders, but instead saw a 0.5 percent decline.

One bright spot emerged Thursday: retailers. Their same-store sales last month exceeded analysts’ expectations. Gap’s stock, for instance, jumped nearly 13 percent in regular trading after it projected higher earnings for the latest quarter.

Peter Whoriskey is a staff writer for The Washington Post handling investigations of financial and economic topics. You can email him at peter.whoriskey@washpost.com.
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