Employment Probably Slowed in August as Confidence in U.S. Economy Waned

Hiring probably slowed in August and U.S. manufacturing contracted for the first time in two years as Americans lost confidence that the recovery will be sustained, economists said before reports this week.

Payrolls climbed by 75,000 workers after a 117,000 increase in July, according to the median forecast of 65 economists surveyed by Bloomberg News before Labor Department data Sept. 2. Factories pulled back last month for the first time since July 2009, a report the previous day may show.

The first U.S. credit downgrade in history, political squabbling over the budget and mounting concern over a default in Europe caused the Standard & Poor’s 500 Index to plunge 17 percent from July 22 to Aug. 8, probably prompting American companies and consumers to cut back. Federal Reserve Chairman Ben S. Bernanke last week said the recovery had been “less robust” than hoped and reiterated that the central bank still has tools to stimulate growth.

“The underlying trend is weakness moving into the second half of the year, where we expect much more of a pullback,” said Bricklin Dwyer, an economist at BNP Paribas in New York.

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