Fewer Americans than forecast filed first-time claims forunemployment benefits last week, which may reflect difficultyadjusting the data for seasonal swings at the start of a newquarter.

Applications for jobless benefits dropped 30,000 to 339,000 inthe week ended Oct. 6, the fewest since February 2008, LaborDepartment figures showed today. Economists forecast 370,000claims, according to the median estimate in a Bloomberg survey. Onestate accounted for most of the plunge in claims, a LaborDepartment spokesman said as the data were issued to the press.

Waning dismissals may help clear the way for bigger hiring gainswith any improvement in demand. At the same time, the globaleconomy cooling and a lack of clarity on U.S. fiscal policy arehurdles for faster gains in employment.

“Job destruction is really not the problem,” Scott Brown, chiefeconomist at Raymond James & Associates Inc. in St. Petersburg,Florida, said before the report. “It's been the relatively weakpace of new hiring.”

Estimates for first-time claims ranged from 355,000 to 377,000in the Bloomberg survey of 49 economists. The Labor Departmentrevised the number of applications for the prior week up to 369,000from a previously estimated 367,000.

Unadjusted claims typically surge at the start of a quarter aspeople receiving benefits reapply in order for the government torecertify their applications, the Labor Department spokesman said.The year's increase was smaller than projected, because one largeshowed a drop rather than an increase, the spokesman said. Thebreakdown by state will show up in next week's report.

The U.S. trade deficit widened in August as exports dropped, areport from the Commerce Department also showed today. The gap grew4.1 percent to $44.2 billion from $42.5 billion in July.

The four-week moving average for jobless claims, a less volatilemeasure, fell to 364,000 from 375,500.

The number of people continuing to collect jobless benefitsdropped by 15,000 to 3.27 million in the week ended Sept. 29. Thecontinuing claims figure does not include the number of workersreceiving extended benefits under federal programs.

Those who've used up their traditional benefits and are nowcollecting emergency and extended payments decreased by about23,000 to 2.14 million in the week ended Sept. 22.

The unemployment rate among people eligible for benefits held at2.6 percent in the week ended Sept. 29. Twenty-eight states andterritories reported an increase in claims, while 25 reported adecrease.

Claims, Payrolls

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

Labor market news was mixed last month, according to the mostrecent data on employment from the Labor Department. The joblessrate dropped to 7.8 percent in September, the first reading below 8percent since January 2009. On the other hand, payrolls expanded by114,000, the least since June.

Brighter job prospects may help President Barack Obama as theNovember elections draw nearer. With economic issues central to therace, the 0.3 percentage-point drop in unemployment aids thepresident's case against Republican challenger Mitt Romney.

Businesses' hiring and firing plans, nonetheless, could affectwork opportunities in coming weeks. Cummins Inc., a maker ofengines, said this week it expected to cut as many as 1,500 jobs bythe end of 2012 as its outlook for revenue and profit worsened.

“We continued to see weak economic data in a number of regionsduring the third quarter, increasing the level of uncertaintyregarding the direction of the global economy,” Chief ExecutiveOfficer Tom Linebarger said in an Oct. 9 statement. “As a result ofthe heightened uncertainty, end customers are delaying capitalexpenditures in a number of markets, lowering demand for ourproducts.”

Bloomberg News

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