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Signs emerge that U.S. job market may be picking up

WASHINGTON — The job market is sending signs that it may be strengthening.

The number of people seeking unemployment benefits has sunk to its lowest point in six years because few companies are laying anyone off.

A survey of service companies found that they added jobs last month at their fastest pace in six months.

And more small businesses say they plan to hire than at any point since the recession began.

All of this is prompting some economists to forecast a healthier job gain in September than the economy has produced in recent months.

"If you put all that together, it suggests that there has been an improvement in job market conditions," said Paul Ashworth, an economist at Capital Economics.

Ashworth predicts that employers will have added 220,000 jobs in September. That would be the biggest gain in nearly seven months and would mark a sharp reversal from the summer. Job growth has averaged just 155,000 a month since April, down from 205,000 in the first four months of the year.

The unemployment rate dropped to 7.3 percent in August from 7.4 percent in July. But the drop mostly occurred because more Americans stopped working or looking for jobs. The government no longer counts people without a job as unemployed once they stop looking for one.

Last week, applications for unemployment benefits fell 5,000 to a seasonally adjusted 305,000. The number had reached 294,000 two weeks earlier, but that figure was distorted by computer upgrades in California and Nevada that prevented those states from processing all their claims. Those two states have now caught up and are reporting complete data, the government says.

Excluding the distorted figure, last week's 305,000 applications were the fewest since September 2007, three months before the Great Recession began.

Separately, the Institute for Supply Management, a trade group of purchasing managers, said this month that service companies stepped up hiring last month. Service companies employ 90 percent of the U.S. workforce and range from the retail and construction industries to health care and financial services.

Manufacturers also added jobs in August, the institute found, though at a slower pace than in July.

In addition, the National Federation of Independent Business has said the percentage of small businesses that plan to add workers rose this month to the highest level since January 2007.

About 3.9 million Americans received unemployment benefits in the week that ended Sept. 7, about 23,000 more than in the previous week. But that total has fallen 32 percent in the past year.

Other reports

Here is a summary of other key economic reports released Thursday:

• Fewer Americans signed contracts to buy homes in August, the third straight decline. The National Association of Realtors said Thursday that its seasonally adjusted index for pending home sales declined 1.6 percent to 107.7 last month. The index has fallen for three straight months after reaching a 6½-year high in May. The pending home sales index measures signed contracts. Buyers typically complete sales one to two months later.

• The U.S. economy grew at a 2.5 percent annual rate from April through June. The Commerce Department said Thursday that its final look at economic growth in the spring was unchanged from a prior estimate made last month. But economists are worried that growth may now be slowing.

Signs emerge that U.S. job market may be picking up 09/26/13 [Last modified: Thursday, September 26, 2013 7:36pm]
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