U.S. Employment Probably Slowed in October as Housing Slumped

Employment in the U.S. slowed in October as a worsening housing slump led to firings at homebuilders, manufacturers and mortgage lenders, economists said before a report today.

Payrolls grew by 85,000 after a gain of 110,000 in September, according to the median estimate of 86 economists surveyed by Bloomberg News. The jobless rate held at 4.7 percent for a second month, based on the survey.

Wage gains may slow as employment weakens, increasing the burden on consumers already saddled with rising fuel costs and declining home values. The Federal Reserve has lowered the benchmark interest rate twice in as many months to prevent the real-estate recession from dragging down the rest of the economy.

``The next shoe to drop is that the labor market starts to soften,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. ``There's some tentative evidence of it.''

The Labor Department report is due at 8:30 a.m. in Washington. Projections ranged from increases of 10,000 to 121,000. An October gain as forecast would cap the smallest four-month increase in four years.

Estimates for the jobless rate ranged from 4.6 percent to 4.9 percent. The rate dropped to 4.4 percent in March, matching the October 2006 level as the lowest in five years.

Factories probably cut 15,000 workers from payrolls, based on the Bloomberg survey median. Manufacturing employment has shrunk by 16,000 a month on average this year, while construction companies have reduced staff by about 8,000 a month.

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