Oct. 31 (Bloomberg) -- U.S. employers probably added 175,000 workers to payrolls in October, the most in five months, while the unemployment rate held at a three-year low of 5.4 percent, the median forecast in a Bloomberg News survey of economists shows.

The Labor Department's report will be released three days after the Nov. 2 presidential election, which polls show is a toss- up. President George W. Bush says his tax cuts have helped the economy, while Democratic challenger John Kerry says they haven't boosted jobs.

``The focus this week will be jobs related -- will President Bush keep his job and by how much will payrolls rebound in October,'' said Joseph Abate, senior U.S. economist at Lehman Brothers Inc. in New York.

The projected employment gain would follow September's rise of 96,000, less than forecast in part because of hurricanes in the Southeast. Faster job growth is needed to help boost incomes, spending and the economy. A Commerce Department report tomorrow is forecast to show Americans spent more than they earned last month.

Employment growth cooled from earlier this year, when a quarter million jobs a month were added through May. Less job growth in September probably helped hold incomes to a 0.3 percent gain during the month, according to the median forecast in a Bloomberg survey. Personal spending probably rose twice as much as incomes last month, the survey showed.

Fed Policy

The jobs statistics will be the last Federal Reserve policy makers will see before their Nov. 10 meeting. All 46 economists in a Bloomberg News survey forecast central bankers to raise their benchmark overnight lending rate a quarter point to 2 percent. Fed officials have signaled as much in recent comments.

``No doubt, the recent run-up in energy prices poses some challenges, but the evidence indicates that, without some further material shock, aggregate demand is on track, consistent with sustained economic growth,'' Fed Vice Chairman Roger Ferguson said in a speech two days ago.

Manufacturing, responding to increased third-quarter consumer demand and business spending on equipment, probably expanded in October, a report tomorrow is forecast to show. The Institute of Supply Management's gauge of factory activity is forecast to hold at 58.5 in October. Readings above 50 signal expansion and the index has shown growth since May 2003.

A survey last week showed that record crude oil prices have so far led to little change in corporate spending plans. More said they plan to boost spending instead of reduce it. Eighty-six percent of manufacturers said their ``spending plans are little changed'' this year, according to the National Association for Business Economics. Ten percent expect to buy more business equipment, while 5 percent said they plan to reduce spending.

Energy Costs

People are drawing down savings to spend at a time when energy costs have increased. Energy prices may increase consumers' fuel bills by $60 billion and may subtract as much as 0.9 percentage point from fourth-quarter growth, according to an Oct. 22 research report by economists at Citigroup Global Markets Inc.

``We are seeing retail as OK,'' said Joseph Galli, chief executive of Newell Rubbermaid Inc., the maker of Rubbermaid plastic containers, in an interview last week. ``For our products it certainly hasn't been gangbusters, but its held up OK.''

The economy grew 3.7 percent at an annual rate in the third quarter after a 3.3 percent pace in the second, the government said two days ago. Consumer spending rose at a 4.6 percent annual rate, almost three times the pace of the prior quarter. Since 2001, the economy has grown an average 3.5 percent, faster than the 3.2 percent average since 1970.

`Rapid Expansion'

``This rapid expansion has been concentrated in the five quarter following the 2003 Bush tax cuts,'' according to a report from Tim Kane and Rea Hederman, analysts at the Heritage Foundation, a Washington-based research institute. ``Since the third quarter of 2003, growth has averaged 4.6 percent.''

President Bush said he wants to keep taxes low and is counting on increased revenue from a faster economy to help shrink the budget deficit. If elected, Kerry said he promises to raise taxes on the wealthiest Americans to reduce the budget deficit.

The shortfall in the just-ended fiscal year widened to a record $413 billion, partly a reflection of increased spending to fight the war in Iraq. While a record in dollar terms, the gap is 3.7 percent of gross domestic product, well below the all-time high of 5.9 percent of growth reached in 1983.

A daily Washington Post and ABC News poll conducted Oct. 27- 30 showed Bush and Kerry each got the support of 48 percent of likely voters nationwide. The poll questioned 2,617 adults identified as likely to vote and the margin of error was plus or minus 3 percentage points. A survey by Zogby International for Reuters Group Plc over the same period found the same result.

In the Post poll, the economy and jobs ranked as the single most important issue for 24 percent of respondents, followed by the war in Iraq with 21 percent and terrorism at 20 percent.

                         Bloomberg Survey

Date    Time   Period  Indicator               BN Survey   Prior
11/01    8:30   Sept.  Personal Income           0.3%      0.4%
11/01    8:30   Sept.  Personal Spending         0.6%      0.0%
11/01   10:00   Sept.  Construction Spending     0.4%      0.8%
11/01   10:00   Oct.   ISM Manufacturing         58.5      58.5
11/01   10:00   Oct.   ISM-Prices Paid           79.0      76.0
11/03   10:00   Sept.  Factory Orders            0.4%     -0.1%
11/03   10:00   Oct.   ISM Non-Manufacturing     58.0      56.7
11/04    8:30   10/23  Continuing Claims         2811K     2823K
11/04    8:30   10/30  Initial Jobless Claims    340K      350K
11/04    8:30   3Q P   Productivity              1.7%      2.5%
11/04    8:30   3Q P   Unit Labor Costs          2.3%      1.8%
11/05    8:30   Oct.   Avg. Hourly Earnings      0.3%      0.2%
11/05    8:30   Oct.   Change Nonfarm Jobs       175K       96K
11/05    8:30   Oct.   Unemployment Rate         5.4%      5.4%
11/05   15:00   Sept.  Consumer Credit            $7B    $-2.4B

To contact the reporter on this story: Vince Golle in Washington vgolle@bloomberg.net .