The U.S. probably lost jobs in September for the ninth consecutive month and manufacturing shrank as the credit crisis intensified, economists said before reports this week.
Payrolls probably fell by 105,000, according to the median estimate in a Bloomberg News survey ahead of the release of Labor Department figures Friday. A report from a private group may show factories stagnated this month as demand softened.
The worst financial-markets meltdown since the Great Depression is dealing another blow to an economy reeling from mounting job losses, a housing slump in its third year and a pullback in consumer spending. Weakening growth overseas will limit demand for U.S.-made goods, further hurting manufacturing.
"Things are definitely looking worse," said David Resler, chief economist at Nomura Securities International Inc. in New York. The credit crisis "will magnify the degree of the economic downturn. The labor market is weak, and manufacturing is going to slow as some of our trading partners are in a recession like the U.S."
The employment report may show the jobless rate stayed at a five-year high of 6.1% this month, according to the Bloomberg survey. Factory payrolls probably fell by 50,000.
The Institute for Supply Management's factory index probably slid to 49.5, from 49.9 in August, the survey median shows. The index for service industries, which make up almost 90% of the economy, declined to 50 from 50.6 the prior month, economists forecast.
An index reading of 50 is the dividing line between expansion and contraction for the Tempe, Ariz., group's manufacturing report, due Wednesday, and for its services report, due two days later.
Companies will get less support from overseas demand in the coming months. Europe's economy contracted in the second quarter for the first time since the introduction of the euro almost a decade ago, and Japan's economy shrank in the same period.
U.S. businesses also are limiting spending on new equipment. Factory orders fell in August for the first time in six months, economists in the Bloomberg survey predict ahead of Commerce Department figures due Thursday.
Another Commerce report today may show automakers' incentives helped to lift personal spending by 0.2% in August, according to the median forecast of economists. Still, Americans remain under pressure, and consumer spending may stagnate this quarter, the worst performance since 1991, according to a Bloomberg survey in early September.
