By Courtney Schlisserman Sept. 11 (Bloomberg) -- Confidence among U.S. consumers rose more than forecast in September as the pace of job losses slowed and the economy showed signs of pulling out of the recession. The Reuters/University of Michigan preliminary index of consumer sentiment increased to 70.2 this month from 65.7 in August. The index was forecast to rise to 67.5, according to a Bloomberg survey of economists. Americans are starting to grow more upbeat after suffering the biggest destruction of wealth on record from a slump in stocks and home prices. Consumers may still be wary of increasing the spending that makes up 70 percent of the economy as they focus on building savings and paying debt. “The consumer is aware that the economy is at least stabilizing,” Jeff Rosen, an economist at Briefing.com in Chicago, said before the report. “Our concern is once the government stimulus plan ends there will be nothing holding up the economy and it will just sink back down.” The University of Michigan measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars and homes, rose to 71.8 from 66.6. The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, increased to 69.2 from 65 in August. Stocks trimmed gains after the report, with the Standard & Poor’s 500 Index little changed at 1,043.76 at 10:09 a.m. in New York after rising as much as 0.4 percent. Wholesale Inventories A government report today showed inventories at U.S. wholesalers fell in July as higher sales helped distributors move out more of their excess supply. The 1.4 percent decline in stockpiles was greater than forecast and followed a revised 2.1 percent drop in June, the Commerce Department said. Wholesale inventories have had the longest series of declines since records began in 1987. Sales rose 0.5 percent, the third straight gain. The U.S. this quarter will emerge from the worst recession since the 1930s, economists say. The economy will grow at a 2.9 percent annual rate from July through September, according to the median of 61 estimates in a monthly Bloomberg News survey. A Labor Department report last week showed the pace of job losses slowed in August, even as the unemployment rate rose to a 26-year high of 9.7 percent. Companies cut payrolls by 216,000 workers, after a 276,000 drop in July. Jobless Claims The number of Americans filing first-time claims for jobless benefits dropped last week to the lowest level since July, the Labor Department said yesterday. Applications fell by 26,000 to 550,000 in the week ended Sept. 5. The economic recovery will probably be “lackluster,” hobbled by strains in financial markets and weak consumer spending, Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday. The Federal Reserve said Sept. 9 that 11 of its 12 regional banks reported signs of a stable or improving economy in July and August. Five districts, including San Francisco, home to the biggest regional economy, “mentioned signs of improvement,” the central bank said in its Beige Book business survey. Even so, “consumer spending remained soft in most districts,” according to the Fed report. “Loan demand was described as weak, and many districts reported that credit standards remained tight.” Gap Inc., Limited Brands Inc. and American Eagle Outfitters Inc. on Sept. 3 reported smaller August sales declines than analysts had forecast. Gap, which also operates Old Navy and Banana Republic stores, said sales at outlets open at least a year fell 3 percent. Limited said its sales dropped 4 percent and American Eagle reported a 7 percent decline. Starbucks Corp., the world’s largest coffee shop operator, said Sept. 9 it is removing 30 U.S. stores from a list of locations it planned to close after sales and profits improved. The Seattle-based company had planned to shutter about 800 U.S. stores and about 160 international cafes.

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