Sept. 4 (Bloomberg) -- The number of Americans making initial claims for jobless benefits may have eased last week, further indicating companies are slowing the pace of firings, economists said ahead of today's government report. The Labor Department may report applications for unemployment insurance slipped to 393,000 in the week ended Saturday from 394,000 the week before, based on the median estimate of 38 economists surveyed by Bloomberg News. The report is to be released at 8:30 a.m. in Washington. Jobless claims have held below 400,000, which some economists consider the dividing line between job market contraction and expansion, for five of the past six weeks amid signs of faster economic growth. Hiring may not pick up for another half-year because a surge in productivity has enabled companies to produce more with fewer workers, economists said.
``To be below 400,000 is really nice to see, but we really need it to be around 355,000 to show we're getting to growth,'' said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. The weekly claims are ``telling us the unemployment rate is not rising, but they're not telling us that job growth has come back yet.'' With payrolls lean and the economy expanding, the Labor Department may also report worker productivity rose at a revised 6.4 percent annual rate in the second quarter, more than triple the gain of the first three months -- and the fastest since 9.3 percent in the first quarter last year. That report is also set for 8:30 a.m. in Washington. ``You're seeing extremely high productivity in the manufacturing sector,'' said Richard Yamarone, an economist at Argus Research Corp. in New York. In addition, manufacturers continue to hire more people in countries where labor is cheaper, Yamarone said.
Manufacturing
Other reports today may show a turnaround in factory orders and an expanding services economy. The Commerce Department may say at 10 a.m. in Washington that factory orders increased 0.8 percent in July after rising a revised 1.5 percent in June, according to the median of forecasts. An increase would be the third in a row. Also at 10 a.m., the Institute for Supply Management may report its service economy index registered 62.5 in August, economists said. Readings above 50 point to growth. In July, the ISM services index was 65.1. President George W. Bush said Monday he will create an assistant Commerce secretary for manufacturing partly to ``make sure our manufacturing job base is strong and vibrant.'' The U.S. has lost 2.6 million jobs since Bush became president, almost all of them in manufacturing.
Gateway, Goodyear
Yesterday, personal-computer maker Gateway Inc. said it will cut at least 5.3 percent of its workforce by hiring other companies to produce and assemble personal computers. The company has lost money in 10 of the past 11 quarters. Goodyear Tire & Rubber Co., the largest tiremaker in North America, last week said it will eliminate 500 jobs as part of a plan to cut costs by $1.5 billion. The company had losses totaling $1.31 billion in the past two years and declining sales in the U.S., its biggest market. Other companies are hiring. Amgen Inc., the world's largest biotechnology company, expects to hire about 2,500 workers this year, bringing its total to 13,000, Chief Financial Officer Richard Nanula told Bloomberg News. Delta Air Lines Inc, the third-largest U.S. carrier, said last week it is recalling 250 pilots laid off during the Iraq war as the airline moves to increase capacity 12 percent by the end of the year. //www.bloomberg.com