Some economists think the nation will break a 23-month streak of job cuts and add to employment when the government issues the December labor report Friday.
A majority of economists surveyed by Thomson Reuters still think the economy shed jobs in December — a modest loss of 8,000. The unemployment rate is expected to rise to 10.1 percent from 10 percent.
Even a slight gain in jobs, should it happen, won't be enough to lower the unemployment rate anytime soon. Nor would it restore many of the estimated 8 million jobs lost during the recession.
The economy would need to generate more than 200,000 jobs a month to make a dent in the jobless rate, economists say. And even the bullish among them don't think that will happen until the second half of the year.
"We are in for a long, hard slog in the labor market," said Zach Pandl, an economist at Nomura Securities.
A Labor Department report Thursday provided some cause for optimism: Claims for unemployment aid barely rose last week after falling in the previous week to the lowest point since July 2008. And the four-week average of claims fell for the 18th straight week to 450,250. That figure has reached its lowest level since September 2008, when the financial crisis intensified with the collapse of Lehman Brothers.
A gain in jobs for December could improve consumer confidence and spur greater spending, fueling the economic recovery.
Many analysts predict the economy grew by up to 4 percent at an annual rate in the October-December quarter. Federal Reserve officials and private economists worry that much of the recovery stems from temporary factors, such as government stimulus efforts and businesses rebuilding inventories.
More hiring could increase household incomes and spending, which would help sustain the recovery. Signs of more hiring, though, could also draw millions of people who have given up their job searches back into the work force. That could boost the unemployment rate in the next few months to as high as 10.5 percent, economists say.
And it will take several years for the economy to create enough jobs to bring the unemployment rate back down to pre-recession levels of about 5 percent.
"We've seen two years of recession, and we're looking at another five years of elevated unemployment on top of that," said Heidi Shierholz, an economist at the Economic Policy Institute, a liberal think tank. "We've never seen anything like this in modern times."
Many economists expect some positive signs in the report, such as an increase in the average work week from 33.2 hours to 33.3 or higher. That would be up from a record low of 33 hours in October.
A rise of one-tenth of an hour carries the impact of 300,000 new jobs, according to Jonathan Basile, an economist at Credit Suisse. That's because the longer hours translate into higher paychecks and more household income and spending power, he said.
"A small gain in hours has a much bigger impact ... than a small gain in jobs," he said.
There were signs Thursday that consumers might be willing to spend more. Retailers reported modest sales gains for the holiday season, prompting some chains to raise their fourth-quarter profit outlooks. December sales rose 2.8 percent compared with a year ago, according to the International Council of Shopping Centers.
For the overall holiday season, which combines November and December sales, the index was up 1.8 percent. That figure compares with a 5.8 percent drop a year ago, the weakest holiday season in at least four decades.
The December reading was the strongest for 2009 and the most robust since April 2008 when stores collectively had a 3.3 percent gain, according to the ICSC.
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