Sept. 10 (Bloomberg) -- The number of Americans filing first-time claims for jobless benefits dropped last week to the lowest level since July, a sign the labor market is deteriorating at a slower pace. Applications fell by 26,000 to 550,000 in the week ended Sept. 5, lower than economists forecast, from a revised 576,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance declined to the lowest level since April. Employment may be starting to stabilize after 20 straight months of job losses, economists said. Even so, some forecasters predict companies won’t start hiring for months, and the latest Bloomberg News survey showed the unemployment rate may reach 10 percent by early next year. “There’s still a lot of trouble out there, but as conditions improve that should show in the claims data,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report. “As the economic outlook improves, the need to layoff employees comes down.” Economists forecast claims would fall to 560,000 from a previously reported 570,000, according to the median of 44 projections in a Bloomberg News survey. Estimates ranged from 535,000 to 570,000. A Labor Department spokesman said the federal holiday in the U.S. on Sept. 7 resulted in the government estimating results for seven states: California, Colorado, the District of Columbia, Hawaii, Minnesota, Virginia and Wyoming. The spokesman also said such estimates generally don’t result in large revisions in subsequent reports. Four-Week Average The jobless claims report showed the four-week moving average of initial applications, a less volatile measure, fell to 570,000 last week from 572,750. Continuing claims dropped by 159,000 in the week ended Aug. 29 to 6.09 million, the lowest level since early April. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 4.6 percent in the week ended Aug. 29 from 4.7 percent the prior week. Twenty-four states and territories reported an increase in claims, while 29 showed an decrease. These data are reported with a one-week lag. Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows. Job Losses The economy has lost 6.9 million jobs since the recession started in December 2007, the most of any downturn since the Great Depression. Even so, the 216,000 drop in payrolls reported for August was the smallest in a year and lower than economists projected. The U.S. recession “is bottoming out” and the economy is poised for “a slow return,” Alcoa Inc. Chief Executive Officer Klaus Kleinfeld said in a Sept. 2 interview. The head of the largest U.S. aluminum producer said government stimulus in the U.S. and China will affect the New York-based company’s earnings “positively” this year. Even so, some companies continue to eliminate positions. General Motors Co. will cut about 1,000 salaried jobs this month after 1,900 non-union workers accepted buyout and early- retirement offers to help trim costs. Most of the employees will be gone by Oct. 1, a spokesman, Tom Wilkinson, said yesterday in an interview. For Related News and Information: News on the U.S. labor market: TNI US LABOR Stories on the U.S. economy: TNI US ECO Stories on consumers: TNI US CONS For a news search on the recession: STNI USRECESSION

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