By Courtney Schlisserman Jan. 7 (Bloomberg) -- The number of Americans filing first- time claims for unemployment benefits rose less than forecast last week from the lowest level in more than a year, indicating jobs cuts are waning as companies become more confident in the economy. Initial jobless applications increased by 1,000 to 434,000 in the week ended Jan. 2, fewer than the 439,000 claims economists anticipated, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance dropped in the prior week to 4.8 million, and those receiving extended benefits increased. Improving sales and production gains are prompting companies to slow the pace of firings as the economy recovers from the worst recession since the 1930s. Labor Department data tomorrow may show employment was unchanged in December after almost two years of job cuts. “As things get firmer in the U.S., initial jobless claims will continue to push lower,” Andrew Gretzinger, a senior economist at MFC Global Investment Management in Toronto, said before the report. Claims are “not signaling big job creation but the worst is behind us in terms of job losses and hopefully that will turn to job gains.” The four-week moving average of initial claims, a less volatile measure, fell to 450,250 last week, the lowest since the Sept. 13, 2008, from 460,500 the prior one. Claims have fallen 36 percent since reaching a 26-year high of 674,000 in the week ended March 27. Economists forecast claims last week would rise 7,000 from a previously reported 432,000, according to the median of 28 projections in a Bloomberg News survey. Estimates ranged from 400,000 to 455,000. December Employment Employment was unchanged in December after an 11,000 decline a month earlier, according to the median forecast of 74 economists in a Bloomberg survey before tomorrow’s Labor Department report. Payrolls have declined every month since the recession started in December 2007. The jobless rate may have held at 10 percent. Continuing claims dropped by 179,000 in the week ended Dec. 26. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 165,000 to 5.44 million in the week ended Dec. 19. Thirty of the states and territories where workers are eligible to receive the government’s latest 13-week and six- week extensions have begun to report that data, a Labor Department spokesman said. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.6 percent in the week ended Dec. 26 from 3.8 percent, today’s report showed. Declines in 32 States Thirty-two states and territories reported a decrease in claims, while 21 reported an increase. These data are reported with a one-week lag. A report from ADP Employer Services yesterday showed companies in the U.S. cut an estimated 84,000 jobs in December, the fewest since March 2008. While that was greater than economists had anticipated, the survey has overstated the Labor Department’s estimate of private payroll losses by 85,000 a month on average in the six months to November. Another report yesterday showed employers last month announced the fewest job cuts since the recession began. Planned firings fell 73 percent in December, to 45,094 from 166,348 during the same month the prior year, Chicago-based placement firm Challenger, Gray & Christmas Inc. said. Job losses have hurt sales at Cintas Corp. and “we do not know when positive job growth will return,” chief executive officer Scott D. Farmer said in a statement Dec. 22. Cincinnati- based Cintas, the largest U.S. supplier of uniforms, said that profit excluding some items fell to 39 cents a share in the three months ended Nov. 30. ‘Lengthy Process’ “These job losses directly affect our business as many of our products are dependant on customer employee levels,” Farmer said. “It is unlikely that we will return to steady growth until the U.S. job market begins to recover. We anticipate that when job recovery does occur, it will be a slow and lengthy process.” Some companies continue to cut workers. Hugo Boss AG, Germany’s largest clothing maker, said it plans to close a factory in Ohio, its only U.S. plant, by the end of April, a spokeswoman said Dec. 30. The decision affects 300 jobs. For Related News and Information: News on the U.S. labor market: TNI US LABOR Stories on the U.S. economy: NI USECO Stories on consumers: TNI US CONS For a news search on the recession: STNI USRECESSION

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