Hiring rebounded this month and manufacturers turned out more goods as the economy shook off the effects of two hurricanes, economists expect reports this week will show.

Employers probably added 120,000 workers to their payrolls in October after employment fell by 35,000 the previous month, when Hurricanes Katrina and Rita ravaged the Gulf Coast, according to the median estimate of economists in a Bloomberg News survey. A manufacturing index probably held near a one-year high.

The gain in hiring underscores Federal Reserve policy makers’ assurance that the storms would cause only short-term economic disruptions. Economists expect central bankers, meeting in two days, to raise their interest rate target for a 12th consecutive time to prevent inflation from taking hold as the economy grows. Growth accelerated to a 3.8% annual pace in the third quarter, the government said last week.

“The hurricanes and accompanying spike in energy prices did not stymie demand by nearly as much as initially feared,” the chief economist at RBS Greenwich Capital in Greenwich, Conn., Stephen Stanley, said. The growth pace justifies “a steady drumbeat of measured Fed rate hikes into 2006.”

The Labor Department issues its October employment report on November 4. The unemployment rate probably held at 5.1% for a second month, accord to the survey median. The rate was at a four-year low of 4.9% in August.

The largest American railroad by shipments, Burlington Northern Santa Fe, expects to increase hiring to prepare for future growth and avoid personnel shortages that could disrupt service, its chief executive, Matthew Rose, said last week. He didn’t give an estimate of how many more people would be hired.

Fed policy makers are expected to raise the target overnight lending rate to 4% from 3.75% when they next meet November 1, according to the median estimate of economists surveyed.

The rate is expected to peak at 4.5% in the first quarter of 2006, a survey earlier this month showed.

The disruptions associated with the hurricanes “imply that spending, production, and employment will be set back in the near term,” Fed policy makers said when they raised the rate last month. “It is the Committee’s view that they do not pose a more persistent threat.”

Rising interest rates haven’t deterred Americans from spending. A car-buying spree last quarter propelled gross domestic product above the second quarter’s 3.3% annual growth rate, the Commerce Department reported last week.

“This is a robust economy and we don’t see any indications of any material slowdown,” the chief executive of United Technologies, George David, said in an interview last week. Hartford, Conn.-based United Technologies’ products include Carrier air conditioners and Otis elevators.

A report from Commerce today is expected to show consumer spending rose 0.5% in September, reversing the previous month’s drop. Rising receipts at service stations as gasoline prices jumped after the hurricanes and sales of furniture and home electronics probably led the gain, economists said.

The report is also projected to show incomes rose 0.3% in September after falling 0.1% a month earlier due to uninsured losses from Katrina. A report last week showed wage gains over the last 12 months were the smallest since 1981.

Factories are churning out more goods to meet demand. The Institute for Supply Management’s manufacturing index for the month, which is due November 1, is projected to fall to 57 from a 59.4 reading in September that was the highest in a year. A reading of 50 is the dividing line between growth and contraction and the index has averaged 54.9 since November 2001, when the last recession ended.

The Tempe, Ariz., group’s measure for non-manufacturing businesses, due November 3, probably rose to 57 from 53.3, according to economists surveyed.

A regional manufacturing index today covering the Midwest is expected to fall to 57.5 from 60.5.The report is issued by the National Association of Purchasing Managers-Chicago.

September orders to factories probably dropped 1%, reflecting a decline in aircraft bookings, Commerce is expected to report on November 3.

Spending on new construction projects probably rose 0.5% in September, the most since February, after increasing 0.4% a month earlier, Commerce is projected to report November 1.