Jobless Data Expected to Signal Growth

New unemployment figures are expected to show a slight increase in the jobless rate among Americans, but economists say other parts of the data will signal an economy growing at a robust rate.

The Labor Department will issue its July employment report on Friday, and economists are predicting an unemployment rate of 5.4%, just slightly above the 5.3% rate in June, which was the lowest in 14 years.

But economists also predict that the figures will show a healthy increase of 250,000 in non-farm payroll jobs in the economy. This figure is considered a key gauge of future economic growth.

“We’re continuing to show strong momentum coming into the second half of the year,” said David Jones of the brokerage firm Aubrey G. Lanston & Co.

Economists downplayed the small expected rise in the jobless rate, saying the low June figure reflected the timing of the survey and the entrance of students into the summer work force.

They also said an employment report roughly in line with expectations would probably not spur an immediate credit-tightening move by the Federal Reserve.

“The Fed is going to wait for awhile,” Jones said. He added that the central bank probably will await the release of other data to better gauge conditions in the third quarter before taking any further steps.

Economy Robust

But economists also said the Fed could act to tighten interest rates in response to an unusually strong report--for example, one showing a sharp gain in job growth or a big decline in the jobless rate.

The economy, fueled by a strong manufacturing sector, is growing at around 3% a year, according to government figures. The Commerce Department said the gross national product, the value of all goods and services, grew at a 3.1% rate in the second quarter.

The Fed has been keeping an eye on the strong economy, fearing the fast pace will lead to higher inflation. To battle this it would push up interest rates, which makes borrowing more expensive and puts the brakes on growth.