Job growth likely modest but steady in January

Tue Jan 29, 2013 4:25pm EST
 

By Jason Lange

WASHINGTON (Reuters) - Hiring by employers likely held steady in January, pointing to modest growth in the economy despite worries that budget battles in Washington could derail the recovery.

Nonfarm payrolls are expected to have risen 160,000, a marginal step up from December's 155,000 job gain, according to a Reuters survey of economists. The unemployment rate is seen holding steady at 7.8 percent.

Many economists think companies would create more jobs if Washington could resolve a seemingly intractable fight over how to tame the federal budget deficit.

Politicians reached a deal this month to soften the blow from a so-called "fiscal cliff" of austerity measures, but the government is still on track to hurt the economy by slashing spending in March.

A deadlock over spending plans that could lead most government operations to shut down in March also looms, as does the possibility the government might default later this later year and trigger another recession.

"The removal of the uncertainty posed by the fiscal cliff is unlikely to prompt a surge in hiring when there remains so much political uncertainty," said Paul Dales, an economist at Capital Economics in London.

The Labor Department will release the January jobs data on Friday at 8:30 a.m. (1330 GMT).

The recent pace of hiring has been too slow to quickly bring down the country's jobless rate or convince the Federal Reserve, which meets on Wednesday, to abandon its easy money policies.   Continued...