NEW YORK, Jan 11 (Reuters) - Barclays raised its forecast for U.S. gross domestic product (GDP) for the first quarter to a 0.5% expansion, from its original estimate of zero growth, led by the rise in private consumption.

In a research note on Wednesday, the UK bank said it expects private spending to remain resilient in the first quarter of the year in a persistently tight labor market.

Barclays' new forecast, however, was a decline from its estimate of a fourth-quarter rise of 2.0% last year, accompanied by slowing labor demand.

Payroll gains are likely to drop from an average of 241,000 per month in the fourth quarter to 100,000 per month in the first quarter of 2023, while the unemployment rate should rise slightly, Barclays said.

Earlier data showed that U.S. GDP advanced at a 3.2% annualized rate in the third quarter, up from the 2.9% pace that was previously reported. The economy had contracted at a 0.6% clip in the second quarter.

Barclays said it sees a mild recession starting in the second quarter and lasting through the fourth, citing declining activity in the manufacturing sector.

The bank also reiterated its expectation that the Fed will cut the target fed funds rate to between 4.5% and 4.75% at the end of 2023, and continue it lower through next year, hitting 3.0% to 3.25% by the end of 2024.

Barclays cited rising unemployment, core inflation falling below 3% this year, as well as falling business and manufacturing activity for its Fed rate cuts forecast. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bill Berkrot)