By Ian McKendry

WASHINGTON (MNI) – U.S. economists forcast U.S. nonfarm payrolls
are expected to drop slightly in September as the Census Bureau rolls
back hires from the centennial census and private payrolls continue on a
positive trend.

A Market News International survey of economist found a median
estimate of 8,000 jobs lost for the headline nonfarm payrolls number and
an increase of 85,000 for private payrolls.

ADP, a payroll administrative company reported Wednesday that
private payrolls declined by 39,000 in September.

However the report does not necessarily reflect the measurement of
private payrolls in Friday’s employment report.

According to the Census Bureau, expected to be responsible for the
majority of job losses, 77,917 workers were laid off between the second
week of August and the second week of September — significant because
these would be the dates the Bureau of Labor Statistics collects data
for the employment report.

The Census Bureau publishes these numbers on their website and Jim
O’Sullivan, Chief Economist at MF Global told Market News International
in a phone interview that it is “pretty straight forward.”

O’Sullivan, who forecasts an increase of 90,000 private payrolls in
September said his estimate is, “more or less a continuation of the
recent trend.”

“The broad message from claims is that we haven’t seen any
significant acceleration or deceleration in the trend recently,”
O’Sullivan said.

“Government is a bit of a wild card this month with the start of
the school year, ” O’Sullivan said, noting state and local hirings have
been down but there could be a boost through the hiring of election
workers for last month’s primaries.

“I think the risk is on the negative side for government outside of
Census,” O’Sullivan added, referring to the seasonally adjusted change
in goverment workers.

Mike Englund, chief economist at Action Economics told MNI he also
believes private payrolls will continue on trend, estimating an increase
of 75,000 private payrolls.

“The 75,000 is pretty much in the range of the last four numbers”
which have ranged from 51,000 to 107,000,” Englund said.

He added that he views the large increases in private payrolls in
March and April as “irreverent” because the additions were in large part
due to the home buyer tax credit and the appliance programs being
implemented by the government at that time to stimulate the economy.

On manufacturing jobs, Englund said the fluctuations in July and
August were in large part due to a change in plant shutdown patterns by
GM, and he estimates that Friday’s number will be close to zero.

He also said construction hires, which might garner more attention,
may remain flat, but could “toggle” to the plus side with five to ten
thousand jobs added.

In addition to the regularly reported number Friday, the BLS will
provide guidance on the annual revisions for 2010.

BLS calculates the difference between the numbers they estimate in
the employment reports through March 2010, and the actual number of jobs
that were added or lost based on other surveys such as the Quarterly
Census of Employment and Wages.

It then uses the difference to estimate what the final job
revisions will be in the January 2011 report.

Englund said he is expecting a downward revision, and that after
the annual revision last year the BLS private employment numbers were
close to those reported by ADP.

“Last year the payrolls revision really closed the gap to ADP and
if we see the same thing this year that is probably a [negative] 500,000
payroll revision,” Englund said.

Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10

Nonfarm Payrolls -8k* -54k -54k -175k +432k +313k
Private Payrolls +85k* +67k +107k +61k +51k +241k
Mfg Payroll -27k +34k +4k +39k +38k
Unemployment 9.6% 9.5% 9.5% 9.7% 9.9%

Forecasts for September are marked by *

Note: The forecasts are not intended to represent a market
consensus.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MAUDS$]