Jobs: Employment Falls for Third Straight Month in August

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A new survey from Reuters shows that employment fell for the third straight month in August as U.S. Census jobs ended and business scaled back hiring.

(Reuters) - U.S. employment likely fell for a third straight month in August as more temporary census jobs ended and cautious businesses scaled back hiring, an outcome that could pressure the Federal Reserve to prop up growth.

Nonfarm payrolls fell 100,000 after declining 131,000 in July, according to a Reuters survey. Private payrolls, a better barometer of the labor market's underlying health, are seen rising only 41,000, well below the 71,000 jobs added in July.

The Labor Department will release the closely watched employment report for August at 8:30 a.m. EDT.

Against the backdrop of weak data such as housing, larger-than-expected job losses last month could heighten fears the economy is sliding back into recession and push the Fed -- the U.S. central bank -- closer to launching a fresh round of bond buying.

A downbeat report would also further dim chances Democrats would hold their majorities in the U.S. Senate and House of Representatives in mid-term elections in November.

Concerns of a double-dip recession have diminished somewhat this week as data showed strength in manufacturing and gains in consumer spending but the sluggish pace of growth has kept investors on edge.

"The bar is set fairly low for Friday's employment report, but if we get a much larger decline, with weakness particularly evident in private employment, that would raise the odds of a double-dip recession," said Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania.

Despite the expected sharp drop in employment, the jobless rate probably only rose a touch to 9.6 percent from 9.5 percent in July. This is mainly the result of a shrinking labor force as discouraged workers give up the search for jobs.

According to government data, temporary employment for the decennial census fell about 116,391 between the July and August survey periods for the employment report.

While the unwinding of temporary census jobs has been a major drag on payrolls, an uncertain economic outlook has also caused businesses to pare hiring.