Fewer Americans filed claims for unemployment insurance paymentslast week, showing the labor market is starting 2012 on betterfooting than a year earlier.

Applications for jobless benefits decreased 15,000 in the weekended Dec. 31 to 372,000, Labor Department figures showed today.The median estimate of 38 economists in a Bloomberg News surveyforecast 375,000 claims. The average over the past four weeksdeclined to the lowest level in more than three years.

The decrease in firings indicates employers may be getting morecomfortable with their headcounts and their economic outlooks asthe year begins. Economists forecast a Labor Department reporttomorrow will show hiring picked up and joblessness held below 9percent in December.

“Claims are moving in the right direction,” said AnetaMarkowska, a senior U.S. economist at Societe Generale in New York.“The labor market is pretty much treading water, buts it'sdefinitely not as far behind as last year.'

Companies added 325,000 workers in December, more than forecast,adding to evidence the labor market was gaining momentum headinginto 2012, figures from the Roseland, New Jersey-based ADP EmployerServices also showed today.

The December ADP number may have reflected the so-called purgeeffect. Workers, regardless of when they are dismissed or quit,sometimes remain on company records until December, when businessesupdate, or purge, their figures with ADP.

The paycheck processor estimates this change when adjusting itsdata for seasonal variations and, because there were fewer firingsat the end of 2011 than in previous years, ADP may find it moredifficult to formulate a projection.

“There's some possibility that today's number has been pushed upby that idiosyncratic feature of ADP data,” Joel Prakken, seniormanaging director at Macroeconomic Advisers LLC in St. Louis, saidin a press conference after the report. “In an improving labormarket it can lead to an upward bias to seasonal job gains.”Macroeconomic Advisers produces the figures in conjunction withADP.

Stock-index futures trimmed earlier losses after the reports.The contract on the Standard & Poor's 500 Index maturing inMarch decreased 0.3 percent to 1,268.9 at 8:49 a.m. in NewYork.

Survey Results

Claims estimates ranged from 365,000 to 390,000 in the Bloombergsurvey. The Labor Department initially reported the prior week'sapplications at 381,000.

A Labor Department official today said there were no specialissues affecting last week's figures.

The less-volatile four-week moving average decreased to 373,250,the lowest since June 2008, from 376,500.

The number of people continuing to collect jobless benefits fellby 22,000 in the week ended Dec. 24 to 3.6 million. The continuingclaims figure does not include the number of workers receivingextended benefits under federal programs.

Those who've used up their traditional benefits and are nowcollecting emergency and extended payments increased by about 5,400to 3.5 million in the week ended Dec. 17.

The unemployment rate among people eligible for benefits, whichtends to track the jobless rate, dropped to 2.8 percent in the weekended Dec. 24, today's report showed. Forty states and territoriesreported an increase in claims, while 13 had a decrease.

Initial jobless claims reflect weekly firings and tend to fallas job growth — measured by the monthly non-farm payrolls report —accelerates.

“Conditions in the labor market seemed to have improvedsomewhat,” central bank policy makers noted in the minutes of theFederal Open Market Committee's Dec. 13 gathering released thisweek. “Initial claims for unemployment insurance moved down, onnet, since early November but were still at a level consistent withonly modest employment gains, and indicators of job openings andbusinesses' hiring plans were little changed.”

Employers probably increased payrolls by 150,000 workers inDecember after adding 120,000 the prior month, according to themedian forecast of economists surveyed by Bloomberg. Theunemployment rate rose to 8.7 percent from 8.6 percent, the lowestlevel since March 2009, the economists project.

Job cuts announced by U.S. employers rose in December from ayear earlier, according to another report today. Planned firingsclimbed 31 percent to 41,785 last month from 32,004 in December2010, which was the lowest monthly total in 10 years, according toChicago-based Challenger, Gray & Christmas Inc.

Government budget cuts and diminished business prospects arestill leading companies to trim head counts. Boeing Co. announcedyesterday it would close a facility in Wichita, Kansas, thatemploys more than 2,160 workers. Job cuts will begin in the thirdquarter of 2012, the Chicago-based planemaker said in astatement.

Bloomberg News

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