Fewer Americans than forecast filed applications forunemployment benefits last week, easing concern the labor marketmay weaken in the second half.

Jobless claims decreased by 12,000 to 365,000 in the week endedSept. 1, the fewest in a month, the Labor Department reported todayin Washington. The median estimate of 48 economists surveyed byBloomberg called for a drop to 370,000.

Employers are limiting firings as demand warrants holding on tocurrent workers, helping support consumer spending, the biggestpart of the economy. At the same time, weak hiring and unemploymentexceeding 8 percent pose a “grave concern,” Federal ReserveChairman Ben S. Bernanke said last week as he made a case forfurther monetary easing.

“Clearly, the direction of claims is encouraging,” said MillanMulraine, a senior U.S. strategist at TD Securities in New York.The improvement “doesn't seem to be substantial, but we are movingin the right direction.”

Companies added more workers than forecast in August, anotherreport today showed. Employment increased by 201,000, the biggestgain in five months, according to figures from Roseland, NewJersey-based ADP Employer Services. The median forecast of 41economists surveyed by Bloomberg called for an advance of140,000.

Stock-index futures held earlier gains after the claims report.The contract on the Standard & Poor's 500 Index maturing thismonth climbed 0.6 percent to 1,411.9 at 8:45 a.m. in New York.

Estimates ranged from 363,000 to 380,000. The Labor Departmentrevised the previous week's figure up to 377,000, from an initiallyreported 374,000.

A Labor Department spokesman said there was nothing unusual inthe data last week, and that there was no indication HurricaneIsaac had any effect on filings. The level of claims in Louisianahas been fairly stable, he said, and only one state — Colorado —was estimated last week.

The economy added 127,000 jobs in August after a gain of 163,000in July, Labor Department figures due tomorrow may show accordingto the median forecast of economists surveyed by Bloomberg. Thejobless rate remained at 8.3 percent for a second month, the surveyalso showed.

The four-week moving average for jobless claims, a less-volatilemeasure than the weekly figures, rose to 371,250 last week from371,000, today's report showed.

Continuing Claims

The number of people continuing to receive jobless benefits fellby 6,000 in the week ended Aug. 25 to 3.32 million.

The continuing claims figure does not include the number ofAmericans receiving extended benefits under federal programs.

Those who've used up their traditional benefits and are nowcollecting emergency and extended payments decreased by about11,800 to 2.27 million in the week ended Aug. 18.

The unemployment rate among people eligible for benefits held at2.6 percent, today's report showed.

Twenty-five states and territories reported a decline in claims,while 27 reported an increase. These data are reported with aone-week lag.

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

Bernanke, in an Aug. 31 speech in Jackson Hole, Wyoming, saidthe Fed will provide additional policy stimulus as needed topromote a stronger economic recovery.

“The stagnation of the labor market in particular is a graveconcern,” he said. Persistently high unemployment “will wreakstructural damage on our economy that could last for manyyears.”

Companies including Lexmark International Inc., Revlon Inc.,Goldman Sachs Group Inc., St. Jude Medical Inc. and Google Inc.have announced plans to cut staff.

Others are benefiting from improving demand. Freight carrierNorfolk Southern Corp. in Norfolk, Virginia, has been helped by asurge in pickup truck sales.

“We look at the economy as fairly stable at this point in time,”said Dave Denton, chief executive officer of Woonsocket, RhodeIsland-based CVS Caremark Corp., the largest provider ofprescription drugs in the U.S.

“I keep saying it's going sideways,” Denton said at a Sept. 5conference. “I don't see signs the economic climate is going tochange substantially in one way or the other.”

Bloomberg News

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