By Courtney Schlisserman Nov. 12 (Bloomberg) -- Fewer Americans than anticipated filed claims for jobless benefits last week, signaling the worst employment slump in the post-World War II era is easing as the economy expands. Initial unemployment claims fell by 12,000 to 502,000 in the week ended Nov. 7, the lowest level since January, Labor Department figures showed today in Washington. The number of people receiving jobless benefits dropped, as did those getting extended payments. Firings may slow as the loss of 7.3 million jobs since the recession began in December 2007 probably means many companies have already cut staff to bare minimums. That may not stop the jobless rate from climbing further after reaching a 26-year high in October as the shortest workweek on record gives employers room to increase hours before taking on staff. The drop in claims is “reassuring, but these levels are still consistent with job losses,” said Jonathan Basile, an economist at Credit Suisse in New York. “We’re not getting a strong enough vote of confidence yet from claims to say companies have stepped up their hiring and greatly reduced their pace of layoffs.” Stock-index futures trimmed earlier losses after the report. The contract on the Standard & Poor’s 500 Index was down 0.2 percent to 1,094.20 at 8:46 a.m. in New York. Treasury securities were little changed. Economists’ Forecasts Economists forecast claims would fall to 510,000, according to the median of 44 projections in a Bloomberg News survey. Estimates ranged from 495,000 to 525,000. The government revised the prior week’s claims up to 514,000 from a previously reported 512,000. The four-week moving average of claims, a less volatile measure, decreased to 519,750, the lowest level in almost a year, from 524,250. Continuing claims dropped by 139,000 to 5.63 million in the week ended Oct. 31, from 5.77 million the prior week. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. The number of people who’ve use up their traditional benefits and are now collecting extended payments fell by about 6,000 to 4.04 million in the week ended Oct. 24, today’s report showed. President Barack Obama last week signed into law a plan to expand a tax credit for first-time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies. The measure gives jobless people as many as 20 additional weeks of unemployment assistance. Unemployment Rate The unemployment rate among people eligible for benefits, which tends to track the jobless rate, decreased to 4.3 percent in the week ended Oct. 31 from 4.4 percent a week earlier. Twenty-seven states and territories reported a decrease in claims, while 26 showed an increase. The U.S. lost 190,000 jobs in October and the unemployment rate jumped to 10.2 percent, according to government data released last week. While the pace of job losses has slowed from earlier this year, the U.S. has lost 7.3 million jobs since the recession began in December 2007, and economists expect the unemployment rate to exceed 10 percent through the first half of 2010. Economists at JPMorgan Chase & Co. in New York last week said payrolls may soon stop dropping. Their research showed that jobless claims at around 500,000 are consistent with stable payrolls with the unemployment rate around the current level. “The economy is approaching the point at which employment stabilizes and then begins to grow,” Chief Economist Bruce Kasman and colleague Abiel Reinhart wrote in a Nov. 6 note to clients. Job Cuts Applied Materials Inc., the world’s biggest maker of chip equipment, is among companies still reducing costs on concern the economic recovery will be slow to develop. The Santa Clara, California-based company yesterday said it plans to cut as many as 1,500 jobs. The economy is likely to experience a “less-than-robust” recovery and remains vulnerable to shocks, as households rebuild savings and unemployment possibly remains high for “several years to come,” Federal Reserve Bank of San Francisco President Janet Yellen said during a speech Nov. 10. After their meeting last week, Fed policy makers reiterated a pledge to keep the interest rate target low “for an extended period,” and said unemployment was one of the variables they’ll watch to determine when to change course. To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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