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Employers probably hired fewer workers in May and manufacturing cooled as the jump in fuel costs and the effects of Japan’s earthquake rippled through the U.S., economists said before reports this week.

The projected 185,000 gain in payrolls would follow a 244,000 April increase, according to the median forecast in a Bloomberg News survey before Labor Department figures June 3. Another report may show factories grew at the slowest pace in seven months.

Faster progress in the job market is needed to help consumers weather the increase in energy prices and lift spending, which accounts for 70 percent of the economy. At the same time, supply disruptions from Japan are restraining manufacturing, which led the U.S. out of the recession.

“High gasoline prices are damping the pace of hiring a bit,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “Manufacturing will expand at a more moderate pace. We’re talking about a slow patch in the economy.”

The Labor Department employment report will also show the jobless rate dropped to 8.9 percent in May, according to the survey median. The rate unexpectedly climbed in April for the first time in five months, rising to 9 percent from 8.8 percent.

Private payrolls, which exclude government agencies, grew by 210,000 after advancing by 268,000 the prior month, according to the survey median.

‘Stubbornly High’

Target Corp. (TGT), the second-biggest U.S. discount retailer, posted first-quarter revenue that missed analysts’ projections as rising fuel prices curbed shopping.

General Motors Co. (GM) is among manufacturers looking beyond the temporary lull. The Detroit-based automakers said on May 10 that it will spend $2 billion and add or preserve 4,000 jobs at eight U.S. plants as it boosts production. Since then, GM has announced it’ll take on 2,500 workers in Detroit and add 110 jobs in Texas as part of the plan.

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China’s industrial companies’ profit- growth slowed after the government raised interest rates and curbed lending to rein in inflation and limit asset bubble risks.

Profit rose 29.7 percent in the first four months to 1.49 trillion yuan ($230 billion) from a year earlier, the National Bureau of Statistics said on its website today. That compared with a 32 percent gain in the first quarter of this year.

Premier Wen Jiabao is seeking to sustain growth in the world’s second-biggest economy to create jobs and maintain social stability while curbing inflation that has exceeded his target every month this year. The central bank has raised interest rates twice this year and the government has intensified its crack-down on speculation in the property market by introducing purchase limits in some cities.

“Profit growth is expected to slow because their revenue will not grow as fast as before as the economy cools down due to the tightening,” Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said before today’s release. “Manufactures will be facing higher costs of power as they have to generate electricity themselves due to the power shortage.”

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped for a seventh day, falling 0.1 percent by the break at 11:30 a.m. local time. It has slid 4.4 percent this week.

Industrial companies’ sales increased 29.5 percent in the first four months of the year to 24 trillion yuan, according to the statistics bureau’s statement.

Profits rose 34 percent in the first two months of this year.

Consumer Prices

Consumer prices rose 5 high risk personal loans.3 percent in April, staying above 5 percent for the second straight month and exceeding the government’s target of 4 percent for 2011.

Industrial companies’ profit growth may decline even as profitability may improve because of the recent decline in commodity prices, Ping’an Securities Co. analyst, He Qingming, wrote in a May 23 report.

Aluminum Corp. of China Ltd., the nation’s largest producer of the metal, on April 21 reported a 47 percent drop in first- quarter profit on higher raw-material and fuel costs.

China’s Sinovel Wind Group Co., the largest wind-turbine maker in the world’s biggest wind energy market, on April 26 said profit growth slowed to 1 percent in the first quarter, compared with a 51 percent annual gain in 2010.

With inventory levels rebounding and input prices rising, industrial firms’ profit growth will be under pressure and is expected to grow about 23 percent for the whole year, CITIC Securities Co. said in an April 28 note to clients.

The monthly profit survey covers enterprises in all 31 provinces and municipalities, replacing the quarterly announcements made previously.

The statistics bureau this year changed the annual sales threshold for companies eligible for inclusion in the survey to 20 million yuan from 5 million yuan.

–Zheng Lifei. Editors: Ken McCallum, Lily Nonomiya

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at +86-10-6649-7560 or lzheng32@bloomberg.net

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High gasoline prices, government budget cuts and weaker-than-expected consumer spending caused the economy to grow only weakly in the first three months of the year.

The Commerce Department estimated Thursday that the economy grew at an annual rate of 1.8 percent in the January-March quarter. That was the same as its first estimate a month ago.

Consumer spending grew at just half the rate of the previous quarter. And a surge in imports widened the U.S. trade deficit.

Most economists think the economy is growing only slightly better in the current April-June quarter. Consumers remain squeezed by gas prices, scant pay increases and a depressed housing market.

Analysts estimate that growth has accelerated slightly to around 2.5 percent in the current April-June quarter. For the entire year, they think the economy will grow around 3 percent. That would be little changed from the 2.9 percent growth in 2010.

Also Thursday, the government said more people applied for unemployment benefits last week. It was the first increase in three weeks and evidence that the job market remains sluggish.

The number of people seeking benefits rose by 10,000 to a seasonally adjusted 424,000. Applications are above the 375,000 level that’s consistent with sustainable job growth. Applications peaked at 659,000 during the recession. Employers stepped up hiring this spring, but some economists worry that rising applications indicate hiring is slowing.

Economists had been more optimistic when the year began. They assumed that a cut in workers’ Social Security taxes, which raised take-home pay, would boost consumer spending. And new business tax breaks were thought likely to spur business spending.

But political upheaval in the Middle East and North Africa sent energy prices soaring. The result was that consumers had to pay more for gas, leaving less money to spend on other items.

The government’s revised estimate for gross domestic product _ the economy’s total output of goods and services _ showed consumer spending growing at an annual rate of just 2.2 percent. That’s sharply down from an initial estimate of 2.7 percent.

Consumer spending, which accounts for 70 percent of economic activity, had grown at a much faster 4 percent rate in the October-December period.

The GDP revision showed that the government sector is dragging on growth. Government spending fell at an annual rate of 5.1 percent. Federal and state and local governments have cut spending to battle budget deficits.

Economists expect government spending to remain weak. They note that Congress will likely slash spending to try to shrink $1 trillion-plus budget deficits.

Exports grew faster than previously estimated last quarter _ a brisk 9.2 percent rate. But imports grew even faster _ at a 9.5 percent rate _ causing the U.S. trade deficit to widen. A higher trade deficit subtracts from growth.

Spending by companies on equipment and software grew at a solid rate of 11.6 percent. Economists expect that to continue as companies take advantage of one-year tax write-offs for such purchases.

David Wyss, chief economist at Standard & Poor’s in New York, said he thinks the economy will grow at an annual rate of 2.5 percent in the current quarter. Wyss said he expects growth to strengthen slightly to around 3 percent in the second half of this year.

In part, that’s because the U.S. manufacturing supply disruptions caused by the Japanese earthquake and nuclear crisis in March should ease. And auto plants and other factories get back to full production.

Still, analysts think the economy may not be able to exceed 3 percent growth for the full year.

“There are just too many headwinds for the economy to fight against at the moment,” Wyss said.

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Hackers have breached a database at Sony Ericsson

British lawmakers said Monday they still have “significant concerns” about the takeover of chocolate maker Cadbury by Kraft Foods Inc. _ more than a year after the controversial deal.

The Business, Innovation and Skills Select Committee also strongly criticized Kraft’s chief executive Irene Rosenfeld for refusing to appear before parliamentary hearings into the takeover.

The report _ titled “Is Kraft working for Cadbury?” _ said Kraft’s attitude to the inquiry “steered close to a contempt” of the House of Commons.

It also chastised the U.S. food group for failing to accept criticism from Britain’s takeover market regulator of its U-turn on promises to keep open a British factory.

Kraft’s purchase of Cadbury for 11.5 billion pounds in February 2010 caused much consternation in Britain, where it is a much-loved brand, and kicked off a government review of foreign takeover rules.

Rosenfeld did not make her first visit to Cadbury’s historic base in Bournville, England, to meet management and employees until October 2010.

She also refused requests from lawmakers to appear at hearings either in person or via video link to give assurances about future job levels at Cadbury, instead sending Executive Vice President Marc Firestone to face hostile questioning from lawmakers.

Both lawmakers and the public were further enraged when Kraft backtracked on its plans for Cadbury’s Somerdale plant in western England. During the long and bitter takeover battle, Kraft said it would save the Somerdale plant and 400 associated jobs, a decision that would have reversed earlier plans by Cadbury to close the factory and move production to Poland.

However, shortly after Kraft completed the deal in February, it said the plant would close by 2011.

“That sorry episode overshadowed what could have been a positive discussion on the future of Cadbury under Kraft’s ownership,” the committee said in its report payday loans guaranteed no fax. “In its correspondence with the committee, Kraft in our view steered close to a contempt of the House. We trust that that will not be repeated.”

The committee said it remained concerned on two fronts: Kraft’s commitment to British Cadbury brands given strategic decisions are being made from Kraft’s European headquarters in Zurich, and the company’s apparent lack of consultation with union leaders about pay and conditions for workers.

“One year on from Kraft’s predatory purchase of Cadbury the workers are still none the wiser about the company’s commitments to its U.K. businesses,” said Jennie Formby, national officer of the Unite union. “In fact, we now have less information about the company’s current state and future intentions than before the takeover.”

“Workers look at Kraft’s horrendous multi-billion debt, consider its record in other countries where jobs have gone, plants have shut and wages have been cut, and rightly worry about what the future holds for them,” Formby added.

However, the report said the committee was “encouraged” by Kraft’s promise to continue investing in Cadbury, adding that lawmakers understood that no further jobs would be axed in Britain.

“Whilst Kraft did not extend its undertakings on jobs, the strong indication to us was that the extent of investment at Bournville and other sites would only make sense alongside retention of employment levels in the U.K.,” the report said. “We trust that our interpretation is correct. If it is not, we shall expect any change in the position to be made public by Kraft at the earliest opportunity.”

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The German Bundesbank said Europe’s largest economy will probably lose some growth momentum over the coming months after an “explosive” start to the year.

“Growth is likely to ease somewhat in the foreseeable future,” the Frankfurt-based Bundesbank said in its monthly bulletin published today. The economy’s 1.5 percent growth rate in the first quarter from the previous three months “considerably overstates the underlying economic momentum. Output growth was clearly lifted during the reporting period by backloading and catching-up effects.”

Germany’s economy is powering the euro region’s expansion after expanding a record 3.6 percent in 2010. Companies are stepping up spending and hiring to meet booming export orders, while unemployment at a 19-year-low is encouraging consumer spending. The Bundesbank said today the “upturn could support economic activity for some time on line pay day loans.”

Still, the central bank called faster inflation among risks to economic growth, saying monetary policy is still “extremely expansionary.” The “price climate has deteriorated significantly,” according to the report.

“The stabilizing effects emanating from domestic demand can only take full effect in a tension-free environment,” the Bundesbank said. “Potential risks in this respect accompany the current scenario in that the economy is traversing the corridor of normal utilization at what appears to be a virtually undiminished pace of expansion,” with both business expectations and consumer confidence having “reached highs exceptionally early on in this cycle.”

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Southeast Asian nations backed Singapore Finance Minister Tharman Shanmugaratnam as a possible choice to succeed Dominique Strauss-Kahn as head of the International Monetary Fund.

Shanmugaratnam “is certainly well qualified” and the IMF should consider all candidates for the role of managing director, including those from Asia or Latin America, Philippine Finance Secretary Cesar Purisima said in a Bloomberg Television interview today. Thai Finance Minister Korn Chatikavanij said yesterday Asia has good candidates, including Shanmugaratnam.

“In the late 90s, Asia went through a debt contagion itself and I think that experience leading through that crisis can come in handy in helping our European friends in their own debt crisis,” Purisima said today.

Strauss-Kahn’s resignation this week after being charged with attempting to rape a New York hotel maid kicked off a contest for his successor. Europe’s officials have moved to retain the job as emerging markets including Asia, South America, and Russia seek greater representation at the IMF, which has always been headed by a European since it started in 1946.

The IMF made Shanmugaratnam the chair of its steering committee for up to three years in March, and the minister is also a member of the Group of Thirty, an international economic and monetary affairs advisory group.

Thailand’s Korn said the Singapore finance chief was “one of the most capable, technically sound, well rounded and experienced finance ministers in the world.”

Deputy Premier

Shanmugaratnam, 54, was named this week as deputy prime minister and manpower minister while retaining the finance portfolio during a cabinet reshuffle by Singapore Prime Minister Lee Hsien Loong.

He has headed the island’s finance ministry since December 2007, and was managing director of the central bank in 2001. The Southeast Asian nation’s gross domestic product grew a record 14.5 percent last year after shrinking in 2009 amid the global recession.

Shanmugaratnam said the announcement of Singapore’s new cabinet has “put paid” to any rumors that he will move to the IMF, the Straits Times newspaper reported on May 19. The finance ministry declined to comment on the IMF role when contacted by Bloomberg News today.

European officials have moved to retain the privilege of leading the IMF, set up after World War II to promote global financial stability, supporting French Finance Minister Christine Lagarde. The U.S. has said it wants “an open process that leads to a prompt succession.”

Under the IMF’s rules, its executive board selects the managing director and any member can make a nomination. Prior to appointing Strauss-Kahn in 2007, the board said candidates must have a “distinguished record in economic policy-making at senior levels” and “demonstrated the managerial and diplomatic skills needed to lead a global institution.”

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If St. Louis hopes to build up its biotech industry, it will need both cash and brainpower. Now the people who are trying to grow it here are using a little of the first to tap a lot of the second.

The BioGenerator, an arm of the Coalition for Plant and Life Sciences, said Tuesday that it is investing $50,000 from its Spark Fund into a new firm designed to help drug startups grow. SARmont will be a contract research organization (CRO) housed at BioGenerator’s Central West End facility. It will work with researchers and investors who are trying to bring new drugs to the market.

“Our sweet spot is in all of the work that needs to get done before a company starts clinical and manufacturing work,” said Chief Executive Randy Weiss. “Our core expertise is drug design.”

That expertise largely comes in the mind of Dr. John Talley, SARmont’s chief scientific officer and the lead inventor of several big commercial drugs, including $3 billion arthritis medicine Celebrex. SARmont will essentially be offering the skills and experience of Talley and his team to consult with others who are trying to do what he has done.

“That’s part of our special sauce. We’ve actually seen molecules go from the lab all the way to the pharmacy,” Talley said. “There aren’t that many folks who can say they’ve done that.”

SARmont is starting small

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