By Timothy R. Homan Feb. 5 (Bloomberg) -- The economy in the U.S. probably added jobs in January for the second time in three months, showing the pickup in growth is beginning to boost the labor market, economists said before a government report today. Payrolls rose by 15,000 workers last month after falling by 85,000 in December, according to the median estimate of 85 economists surveyed by Bloomberg News. Unemployment may have held at 10 percent, near a 26-year high, for a third straight month. Companies such as Cisco Systems Inc. plan to increase staff as businesses update equipment and stimulus plans from the U.S. to Europe to China revive sales. The labor market may be slow to overcome the loss of 7.2 million workers the last two years, explaining why President Barack Obama has made jobs a priority and the Federal Reserve has pledged to keep interest rates low. “Businesses have gotten to very lean levels of staffing, so there’s not a lot of fat to cut,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York, who is forecasting a payrolls gain of 20,000. Employment may grow “through the rest of the year,” he said. The Labor Department’s report is due at 8:30 a.m. in Washington. Economists’ payroll forecasts range from a decline of 100,000 to a 100,000 gain. Estimates for the unemployment rate run from 9.8 percent to 10.3 percent. Benchmark Revisions With today’s report, the government will also issue revisions to payroll figures going back to 2005. The annual benchmark update, which aligns the data with corporate tax records and covers the period from April 2008 to March 2009, will also be announced. The Labor Department estimated in October that payrolls for the 12 months would be cut by 824,000. The drop in payrolls already in the books over the past two years has been the biggest percentage decrease since World War II was ending in 1944-45. January marks the one-year anniversary of the country’s biggest single-month employment plunge in six decades, showing the economic expansion that began in last year’s third quarter has slowed the pace of job cuts. The U.S. lost 741,000 jobs last January after the collapse of Lehman Brothers Holdings Inc. in September 2008 accelerated the employment slump. Obama last week said job creation will be his top priority in 2010. Speaking during his first State of the Union address, he called on Congress to pass a new jobs bill for him to sign into law. Census Hiring In the meantime, a government boost to hiring is already under way at the Census Bureau, which will employ 1.15 million temporary workers in the first half of the year to conduct the population count that takes place every 10 years, the government agency said last month. The program may have the biggest impact on payroll figures in April and May, economists said, and will then subtract from the job count the following months after the work is done. Manufacturing, which accounts for about 12 percent of the economy, has been a driver of the recovery and is projected to continue to expand. The strength has yet to translate into more factory jobs. Manufacturing payrolls may drop by 20,000, the least since December 2007, after a decline of 27,000 in December, according to economists surveyed by Bloomberg. After soaring 65 percent last year from a 12-year low in March, the Standard & Poor’s 500 Index dropped 3.7 percent in January as China stepped up efforts to curb lending and Obama proposed rules to rein in risk-taking at banks. The benchmark index yesterday fell the most since April on disappointing earnings, growing concern over government debt levels in Greece, Spain and Portugal, and jobless claims unexpectedly rose. Growth Accelerates The economy grew at a 5.7 percent annual rate in the fourth quarter, the biggest gain in six years, according to Commerce Department figures released last month. The expansion means businesses may add to payrolls to restock depleted stockpiles. Cisco, the biggest maker of networking equipment, this week predicted sales will accelerate said it will boost its workforce by as much as 3,000 as customers resume spending to deal with surging data traffic. “Almost every country is saying their momentum is better than it was before, and almost every business is saying it’s more optimistic,” Chief Executive Officer John Chambers said in an interview. “It shows a capital spending trend that’s hard to deny, on a global basis.” General Electric Co., the world’s biggest maker of power- plant turbines, is hiring workers in energy, health care and rail transportation in part because global economic-stimulus policies have created demand, two executives said last week. GE is bidding to supply new passenger locomotives for Amtrak, and in November announced a joint venture in China that would make high-speed rail locomotives that may add 200 U.S. jobs.

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