Recruiting in China

THE number of US workers filing first-time claims for unemployment benefits unexpectedly fell to a four-month low, helping to allay concerns about a weakening labor market.

Initial jobless claims declined by 15,000 to 298,000 in the week that ended Saturday, from a revised 313,000 a week earlier, the Labor Department said yesterday in Washington. The four-week moving average, a less volatile measure, dropped to 311,500 from 321,250.

Companies are holding on to employees, even while limiting hiring plans, as they wait to see whether the effects of rising mortgage defaults spread to other parts of the economy. Labor market health is closely linked to the outlook for consumer spending and confidence, which show signs of flagging.

"Labor market conditions overall are not deteriorating and remain pretty steady," said Julia Coronado, a senior US economist at Barclays Capital Inc in New York, before the report. "So far we're not seeing the losses spread beyond housing and finance."

Fastest growth

Another government report showed the US economy grew in the second quarter at the fastest pace in more than a year before last month's credit-market turmoil heightened concern the expansion might be cut short.

Gross domestic product rose at a revised 3.8 percent annual rate from April though to June, propelled by a surge in exports, figures from the Commerce Department showed in Washington. The economy advanced at a 0.6-percent rate in the first quarter.

After the reports, the benchmark 10-year US Treasury note yielded 4.61 percent, down one basis point from Wednesday.

Economists had forecast claims would rise to 316,000, from a previously reported 311,000 for the prior week, according to the median of 40 projections in a Bloomberg News survey. Estimates ranged from 305,000 to 330,000. Last week's claims were the lowest since the week ended May 12.

The number of people continuing to collect state unemployment benefits rose to 2.551 million in the week that ended September 15. The prior week's 2.540 million was the lowest since July 21.

Last month's payrolls report unexpectedly showed a loss of 4,000 jobs, the first decline in four years.

The unemployment rate among people eligible to collect state jobless benefits, which tends to track the national unemployment rate, held at 1.9 percent in the week ended September 15.