Partly because of the retrenching, companies in the S&P 500, excluding financial institutions and utilities, held near-record cash totaling $1.01 trillion in the first three months of 2012, S&P data show.

And even with the fragile labor market, the world's largest economy is expanding. Gross domestic product has grown in each quarter since June 2009, when the worst recession since the Great Depression ended. Growth is weakening, however, with the second-quarter annual pace of 1.3 percent missing a prior estimate of 1.7 percent and below the first quarter's 2 percent.

Payrolls, after slowing in five of the first eight months this year, rose 115,000 in September following a less-than-forecast 96,000 gain in August, according to the median estimate of economists surveyed by Bloomberg ahead of a Labor Department report due Oct. 5.

Private employers added 130,000 workers, they predicted, and the jobless rate rose to 8.2 percent from 8.1 percent in August. That would mark the 44th consecutive month exceeding 8 percent, the longest streak in records since 1948.

'Hard Slog'

“It's just going to be a long, hard slog,” said Joshua Shapiro, the top-ranked forecaster of the U.S. economy for three consecutive months through July, according to data compiled by Bloomberg and based on two years of surveys. “The economy is weak and is going to stay weak,” added Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “The labor market will continue to struggle.”

Bank of America, the second-biggest U.S. lender, is speeding up a 2011 plan to trim $8 billion in expenses and more than 30,000 positions. Hewlett-Packard, the world's largest personal-computer maker, will slash 29,000 jobs instead of the 27,000 it announced in May. Staples is accelerating its shutdown of 15 American stores as consumers shift to using fewer traditional office products such as folders.

The share of U.S. chief executive officers planning to add employees or expand investment during the next six months declined in the third quarter compared with April through June, while a bigger share said they'd cut jobs and spending, according to the Business Roundtable survey conducted Aug. 30 to Sept. 14. The group's economic-outlook index slumped to 66, the lowest since 2009, and the portion of CEOs who anticipate sales will fall more than doubled to 15 percent from the prior period.

“The headwinds we are flying into will likely dominate in the next few months,” said Harry Holzer, a public-policy professor at Georgetown University in Washington and former chief economist at the Labor Department. In addition to corporate cutbacks, “the public sectors at the state and local levels continue to shed jobs. A real turnaround from recent months — that is, something well over 150,000 for the rest of the year — is unlikely,” he said, referring to monthly payrolls.

Slowing Investment

This poses a hurdle for consumer spending — which accounts for about 70 percent of GDP — at a time when other pillars of growth are starting to slacken. Exports decreased 1 percent in July after rising in May and June. Orders for durable goods other than transportation equipment dropped in August for a third consecutive month, signaling slowing business investment.

Fed data show factory activity in the Philadelphia and New York regions shrank in September, even though manufacturing nationwide unexpectedly expanded, with the Institute for Supply Management's factory index rising to 51.5 from 49.6 in August. Measures above 50 represent expansion.

While “this report removes some of the concern” that manufacturing is contracting, “overall, we're looking at economic growth that's moderate but not enough to bring down the unemployment rate significantly,” said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh.

These risks to the expansion help explain why Fed policy makers announced on Sept. 13 their third round of large-scale asset purchases since 2008. Chairman Ben S. Bernanke, for the first time, pledged the central bank will buy bonds until the economy gets closer to his goals, signaling the battle against unemployment eclipses concerns about inflation for now.

“This is a Main Street policy, because what we're about here is trying to get jobs going,” Bernanke said at a news conference after the Fed meeting in Washington. “We're trying to meet our maximum employment mandate.”

Investors encouraged by the Fed's move helped drive the S&P 500 to close at the highest level since 2007 the day of the announcement. The gauge has retreated 1.3 percent since then to 1,440.67 at 4 p.m. in New York on Sept. 28. From here on, “it'll get harder to find good returns based on fundamental performance,” said Jack Ablin, who helps oversee about $65 billion of assets as chief investment officer at Harris Private Bank in Chicago. “Revenue growth is slowing, and unfortunately that creates a very difficult environment for profits to expand.”

'Phenomenal Run'

Retail and consumer-related equities will come under pressure after “a phenomenal run” helped by Fed actions that boosted asset values, Ablin said. While the S&P 500 Retailing Index is up 25 percent this year, it has fallen 1.5 percent since Sept. 13, and the Consumer Discretionary Select Sector SPDR Fund, up 20 percent since Dec. 31, is also off 1.5 percent.

Payroll reports on Oct. 5 and Nov. 2, the last two before the Nov. 6 elections, will be important for voters assessing the economic performance of President Barack Obama, who was leading Republican candidate Mitt Romney 50 percent to 44 percent in the daily Gallup tracking poll of registered voters for the period Sept. 21-27. The U.S. has so far recovered only 4.1 million of the 8.8 million jobs lost as a result of the 18-month recession.

It will take until the end of 2014 for the unemployment rate to fall to 7 percent, Charles Evans, president of the Federal Reserve Bank of Chicago, said Sept. 26 in Hammond, Indiana. The economy would need 200,000 to 250,000 job gains each month for “several, several months” before the Fed can revisit its accommodative policy, he added.

Such a pickup may be a tall order as companies contain costs. Financial firms' U.S. employment postings fell 17 percent to 1,373 last month from September 2011, data compiled by Bloomberg show. They're also not done paring staff, predicted Meredith Whitney, banking analyst and founder of Meredith Whitney Advisory Group LLC in New York.

“There's going to be another round of 50,000 to 100,000 layoffs” in the securities industry, Whitney said Sept. 19 on Bloomberg Television's “Surveillance” with Tom Keene and Sara Eisen. “Wall Street is just going to have an extremely challenged revenue environment” for the “foreseeable future.”

FedEx Corp., an economic bellwether because it ships goods from financial documents to electronics, pared its annual profit forecast last month on slowing demand and a shift to cheaper delivery services. The Memphis, Tennessee-based company, which in August said it would offer workers voluntary buyouts as part of “significant” cost-reductions, will unveil details on more such moves next week.

Expense Control

Some companies' own woes are prompting renewed expense control. Rochester, New York-based Kodak said on Sept. 28 it will eliminate at least 200 more jobs in 2012, on top of the 1,000 cuts it announced on Sept. 10, as the bankrupt photography pioneer shrinks into a commercial-printing-focused business. That follows a global reduction of 2,700 this year.

“Companies are trying to protect profit margins as best they can, so they'll be very guarded” in hiring and capital expenditures, said Michael Mullaney, who helps manage $9.5 billion as chief investment officer of Fiduciary Trust Co. in Boston. That's why he has picked Colgate-Palmolive Co., the world's largest toothpaste maker, and other stocks in “classic defensive sectors” such as health care and consumer staples.

Small companies are responsible for most of the hiring even as big businesses shed jobs, said Lieberman of Advisors Capital, adding that his firm took on a few people this year without issuing a press release. “The big corporate layoffs always make the news,” he said.

Toya Coverson, 35, of Atlanta, lost her $11.50-an-hour position two months ago as a security guard and now is more concerned after hearing of business cutbacks, she said.

“It means there are more people looking for work and not that many jobs,” said Coverson, who hasn't had an interview though she's applied for about 20 openings. “There is going to be fierce competition.”

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