Jan. 22 (Bloomberg) -- The number of Americans filing first- time applications for unemployment benefits last week may have held close to the lowest in almost three years, suggesting companies are retaining workers as growth accelerates, economists said in advance of today's report. Jobless claims may have edged up to 345,000 during the week ended Saturday, based on the median estimate of 36 economists surveyed by Bloomberg News, from 343,000 the week before. Claims in the week ended Dec. 27 fell to 339,000, the fewest since the week President George W. Bush took office in January 2001. The Labor Department report is expected at 8:30 a.m. Washington time.
The strengthening economy has boosted profit and orders at manufacturers such as General Electric Co., encouraging companies to hold on to workers. While the slowdown in staff cuts hasn't translated into a hiring surge, companies may start to add jobs as the economy grows this year at the fastest pace since 1999, according to economists including Robert Mellman of J.P. Morgan Securities Inc. ``The decline in initial jobless claims and sharp improvement in surveys of hiring intentions near the end of last year point to appreciably larger job gains,'' Mellman said in a report. A decline in jobless claims last month contributed to a 0.2 percent rise in the index of leading economic indicators for December, based on the median forecast of 55 economists surveyed by Bloomberg News. The Conference Board reports its gauge of economic growth over the next three to six months at 10 a.m. Washington time. The index climbed 0.3 percent in November.
Signs of Expansion
Weekly jobless claims fell to an average of 356,000 in December from 363,000 in November. Filings averaged 349,000 in the first two weeks of this year. Estimates in the latest Bloomberg survey of economists ranged from 335,000 to 360,000 for the week ended Saturday. The economy may expand by 4.4 percent this year, the median estimate of 57 economists in a Bloomberg News survey this month, the fastest since 4.5 percent in 1999. The Federal Reserve reported last week that U.S. industrial production rose in December for a fourth straight month as low inventories and rising orders spurred companies to increase production.
The National Association of Manufacturers forecast that factory production this year will rise 6.1 percent, the fastest since 1999, prompting producers to hire after three years of cutting jobs. A survey of corporate economists by the National Association for Business Economics found that U.S. companies are hiring more workers than they are firing for the first time in three years.
General Electric
Orders at General Electric, the world's biggest company by market value, rose 19 percent last quarter, indicating ``strong momentum,'' Chief Executive Jeffrey Immelt said in a statement Friday. Units that make locomotives and jet engines will have their best gains since 2000, the company said. Beverly, Massachusetts-based Axcelis Technologies Inc., which makes semiconductor-manufacturing equipment, said fourth- quarter revenue rose at least 44 percent, and the company expects to post its first full-year profit since 2000. Semiconductor makers, including International Business Machines Corp. and Intel Corp., use Axcelis's equipment to make switches on silicon wafers by implanting ions below the surface. ``There's very strong demand for things like DVDs and cell phones that have cameras,'' Axcelis Chief Executive Officer Mary Puma said in an interview Friday. ``All those gadgets consumers like are clearly increasing business.'' Axcelis has added about 25 manufacturing employees at its Beverly plant and is seeking 25 more, Puma said. Axcelis, which has trimmed its workforce by about 31 percent since 2000, will have about 1,650 employees after the additions.
Productivity Gains
At the same time, concern over costs has kept companies from hiring in large numbers, and the economy has lost 1.07 million jobs since the most recent recession ended in November 2001. The U.S. added 1,000 jobs in December, a fraction of the 75,000 to 250,000 economists surveyed by Bloomberg News had estimated, as companies relied on gains in efficiency to meet increased demand. ``Continued robust productivity growth could retard job growth, and sluggish job growth, in turn, could put a damper on the expansion,'' Federal Reserve Bank of Richmond President J. Alfred Broaddus told the Richmond chapter of the Risk Management Association last week. ``Weak job growth has a particularly negative effect on consumer spending, since it erodes the confidence of many households in their future financial security.''
Productivity, a measure of work performed by one employee in an hour, grew in the third quarter at the fastest pace in two decades, the Labor Department said last month. Electrolux AB, the world's largest home-appliances company, will stop making refrigerators at a Greenville, Michigan, factory and shift most production to Mexico. The plant, where Electrolux employs 2,700 workers, will close in 2005, according to a statement from the Stockholm-based company. //www.bloomberg.com