Plus: U.S. Recovery Slows, Employment Rate Stagnates and Service Sector Expands.

IMF: Economic Recovery Losing Momentum
The global economy is forecast to continue its rebound from the recession through the next few years, but a new report finds that economic growth in the United States and Europe is expected to be sluggish at best, while emerging economies pick up the slack.

According to the latest World Economic Outlook, released last week by the International Monetary Fund (IMF), the world economy will grow by 4.8 percent this year and 4.2 percent next year, up from last year’s 0.6 percent decline. The IMF’s previous forecast for the U.S. was revised down from 3.3 percent growth this year to 2.6 percent. Expansion is expected to further slow to 2.3 percent next year.

“To understand what is going on, one has to look at the factors behind this recovery,” Olivier Blanchard, economic counselor and director of the IMF Research Department, said in a press briefing. “Over the last year or so, the main drivers of the recovery were inventory accumulation and fiscal stimulus. The first one is coming to a natural end, and the second one is being slowly phased out. So, what has to happen is that consumption and investment must now take the lead.”

However, consumer spending in the U.S. continues to be hampered by elevated unemployment, tighter credit restrictions and weak investment rates. In contrast, consumption is accelerating in emerging economies and investment is spurring stronger growth. As a result, China, Russia and countries in Eastern Europe and Latin America are forecast to expand 7.1 percent this year and 6.4 percent in 2011, more than double the growth rates for the U.S.

“U.S. authorities will need to find a way to exit from extraordinary intervention to support the recovery without undermining it, while dealing with the long-term legacies of fiscal imbalances, inadequate financial regulation and a weakened banking sector,” Agence France-Presse reports. “A key challenge is government debt, which was projected to rise to about 110 percent of GDP by 2015 under current policies.”

Monthly Job Losses Higher than Forecast
The U.S. economy shed 95,000 non-farm jobs in September, mostly due to reductions in government payrolls, the U.S. Department of Labor reported on Friday. The monthly unemployment rate remained unchanged at 9.6 percent.

Job losses last month exceeded forecasts, as analysts polled by Reuters had anticipated no change in overall payrolls, while economists surveyed by MarketWatch expected a drop of only 8,000 jobs. The private sector added 64,000 jobs in September, below the 75,000 gain expected by the Reuters poll and the 85,000 increase forecast by MarketWatch.

The modest gain in private-sector jobs was not enough to offset the 159,000 jobs shed in government, mostly through losses at schools and local government positions. Manufacturing employment remained unchanged in September and has been relatively flat since May, while the construction industry shed 21,000 jobs last month and mining edged up 6,000 jobs.

“Surveys suggest that small businesses remain reluctant to add workers because of weak sales and uncertainty about future taxes and policies,” the Chicago Tribune reports. “Corporations are continuing to cut costs, in some cases by moving jobs overseas and, where possible, substituting labor with equipment and machinery.”

Meanwhile, employment conditions have slightly improved on a weekly basis, with initial jobless claims falling 11,000 to 445,000 for the week ending Oct. 2, according to a separate report from the Labor Dept. This marked the second consecutive week of falling jobless claims. The four-week moving average fell to 455,750, down from the previous week’s revised average of 458,750.

OSHA Reveals Top 10 Most Cited Violations
During a special session at the National Safety Council (NSC) Congress and Expo in San Diego last week, the Occupational Safety and Health Administration (OSHA) revealed the top 10 most cited violations in fiscal year 2010, according to EHS Today. This year’s list did not deviate significantly from the top 10 violations in recent years.

Thomas Galassi, director of OSHA’s directorate of enforcement programs, shared the following top 10 list of the most cited violations for FY 2010 NSC attendees, according to Occupational Health & Safety:

1. Scaffolding – General (8,371 violations)
2. Fall Protection (7,559 violations)
3. Hazard Communication (6,633 total violations)
4. Respiratory Protection (3,932 violations)
5. Ladders (3,820 violations)
6. Lockout/Tagout (3,531 violations)
7. Electrical – Wiring Methods (3,381 violations)
8. Powered Industrial Trucks (3,224 violations)
9. Electrical – General (2,770 violations)
10. Machine Guarding (2,556 violations)

Galassi said there were approximately 94,000 violations issued for fiscal year 2010, and the top 10 violations represented about 49 percent of all infractions.

U.S. Service Sector Expands More than Expected
Growth in the U.S. service sector rose more than expected in September, according to the Institute for Supply Management’s (ISM) non-manufacturing index (NMI), which rose to 53.2 percent, the ninth consecutive month of growth. An index reading above 50 percent indicates expansion in the key sector.

“Most analysts had expected the index, based on a survey of the nation’s purchasing and supply executives, would rise slightly to 51.8 percent, from 51.5 percent in August,” Agence France-Presse reports.

“Service-sector firms account for about two-thirds of gross domestic product and employ more than four of every five private-sector workers in the U.S.,” the Wall Street Journal explains (subscription required). “Of 18 industries tracked, 11 reported growing in September from August, including management firms, wholesalers and retailers. Three contracted — mining, public administration and educational services — and four were flat.”

Despite the positive findings, the acceleration in services growth in September still remained weaker than the 55.4 percent index reading in the March-May period.

“Respondents’ comments continue to be mixed about business conditions, with a slight majority reflecting optimism,” Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said in a statement.