By Courtney Schlisserman Jan. 14 (Bloomberg) -- The average number of Americans filing first-time claims for unemployment benefits over the past four weeks dropped to the lowest level since August 2008, indicating companies are making fewer job cuts as the economy improves. Jobless claims increased in the latest week. The four-week moving average of initial claims fell to 440,750 last week from 449,750, Labor Department figures showed today in Washington. Weekly jobless claims, which are more volatile, rose by 11,000 in the week ended Jan. 9, more than anticipated, to 444,000. Factories are ratcheting up production and companies are slowing the pace of firings as the economy rebounds from the worst recession in seven decades. An unexpected decline in employment last month indicates companies are hesitant to add to payrolls until demand accelerates. “The labor market is moving in the right direction,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The outlook for the labor market still hinges on broader business confidence. Businesses appear to be very, very cautious.” The number of people receiving unemployment insurance declined to the lowest level since Jan. 10, 2009, and those receiving extended benefits decreased. Economists forecast claims would increase to 437,000 from a previously reported 434,000 for the prior week, according to the median of 43 projections in a Bloomberg News survey. Estimates ranged from 400,000 to 450,000. Claims have fallen 34 percent since reaching a 26-year high of 674,000 in the week ended March 28. Continuing Claims Fall Continuing claims dropped by 211,000 to 4.6 million in the week ended Jan. 2. 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 decreased by about 135,587 to 5.3 million in the week ended Dec. 26. Thirty of the states and territories where workers are eligible to receive the government’s latest six-week extension 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 3.5 percent in the week ended Jan. 2 from 3.6 percent, today’s report showed. Thirty-seven states and territories reported an increase in claims, while 16 had a decrease. These data are reported with a one-week lag. December Jobs The U.S. unexpectedly lost 85,000 jobs in December after a revision for November showed the first gain in almost two years, according to Labor Department data released Jan. 9. The unemployment rate held at 10 percent, near the 26-year high of 10.1 percent reached in October. The report also showed workers were unemployed for 29.1 weeks on average, the most since records began in 1948. AOL Inc., the Internet company spun off from Time Warner Inc. last month, said Jan. 11 it started notifying workers of involuntary job cuts after 1,100 accepted buyout packages. Spokeswoman Tricia Primrose said many of the affected employees would leave the company Jan. 13. AOL had said in November it planned to cut its 7,000-person staff by about one-third. United Parcel Service Inc., the world’s largest package- delivery company, said Jan. 8 it plans to cut 1,800 jobs as it shrinks management at a U.S. unit. The changes reflect the Atlanta-based company’s attempts to halt seven straight quarters of volume declines in its small-package unit, its largest division. Starwood Plans Some companies are considering adding positions. Starwood Hotels & Resorts Worldwide Inc., based in White Plains, New York, said Jan. 12 it plans to add about 6,000 jobs in the U.S. this year. “After a year of hunkering down and cutting costs, companies are driving their top line again,” Frits van Paasschen, Starwood’s president and chief executive officer, said in a statement. “By definition, this means getting back on the road, which not only benefits their own business, but also helps spur job creation.”

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