Employment, manufacturing show growth

Paul V. Arnold, Noria Corporation

Companies kept hiring in August and manufacturing grew at the fastest pace of the year, evidence that record fuel costs aren't derailing U.S. economic growth, economists told Reuters in advance of reports this week.

Employers probably added 190,000 workers in August, after creating 207,000 jobs the previous month, according to the median forecast in a Bloomberg News survey. It would be the first time this year that job gains were above last year's average for two consecutive months. A manufacturing index probably rose for a third month to the highest since December.

More jobs and rising wages are keeping consumers spending even as gasoline prices set records almost every week. Factories are churning out more home electronics, clothing and computers to meet the pickup in demand. With inventories low and sales rising, production gains are likely to keep the economy growing in coming months, economists said.

"All is well with the U.S. economy,'" David Hensley, an economist with JPMorgan Chase Bank in New York, told Reuters. "Growth momentum remains strong well into August. Manufacturing and business spending are providing an important cushion as the latest leg up in energy prices moves through the system.''

The Labor Department issues its August employment report Sept. 2. The unemployment rate probably held at a four-year low of 5 percent for a third month, according to the survey median.

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