Analysts forecast that employers added 100,000 jobs last month, according to a survey by FactSet. The unemployment rate is expected to remain at 8.2 per cent for the third straight month.
The Labor Department will report on July hiring and unemployment trends at 8:30 a.m. Eastern Friday.
Hiring was robust at the start of the year, but then slowed sharply in the spring and early summer. Employers added an average of 75,000 jobs per month from April through June, a third of the average monthly gains from January through March.
That's not enough new jobs to keep up with population growth, let alone satisfy the 12.7 million Americans who are unemployed and looking for work.
The monthly report on job creation and unemployment is the most closely watched indicator of the U.S. economy. There are four reports remaining before Election Day, including one on Friday, Nov. 2, four days before Americans vote.
Another month of tepid job gains could hurt President Barack Obama's re-election campaign. The unemployment rate has topped 8 per cent since his first month in office, the longest stretch on record. No president since World War II has faced re-election with unemployment over 8 per cent.
Weak hiring could also push the Federal Reserve closer to taking more action to spur growth. The Fed, which ended a two-day policy meeting Wednesday, signalled in a statement a growing inclination to take further steps if hiring doesn't pick up.
More than three years after economists declared the recession had ended in June 2009, the economy is growing too slowly to generate enough jobs to lower the unemployment rate. Growth slowed to an annual rate of 1.5 per cent in the April-June quarter, down from 2 per cent in the first quarter and 4.1 per cent in the final three months of 2011.
Recent data suggest U.S. growth is unlikely to improve much in the July-September quarter.
Manufacturing activity shrank for the second straight month in July, a private survey said Wednesday. Consumer confidence improved slightly last month but remains weak.
Rising pessimism about the future is taking a toll on businesses and consumers, many economists say. Europe's financial crisis has weakened that region's economy, hurting U.S. exports. Worries have also intensified that the U.S. economy will fall off a "fiscal cliff" at the end of the year. That's when tax increases and deep spending cuts will take effect unless Congress reaches a budget deal. A recession could follow, Fed Chairman Ben Bernanke has warned.
Americans are responding by spending less and saving more. A big reason growth slowed in the second quarter was that consumer spending, which accounts for roughly 70 per cent of economic activity, slowed to an annual growth rate of 1.5 per cent. That was down from 2.4 per cent in the first quarter.
Businesses are also cautious and are ordering fewer computers, machinery and other long-lasting factory goods. A measure of business investment spending fell 1.7 per cent in June, the third decline in four months.
So far, companies aren't stepping up layoffs. The number of people seeking unemployment benefits has fallen in the past month to a weekly average of 365,500, down from 386,250.