Dec. 18 (Bloomberg) -- U.S. claims for initial unemployment benefits may have fallen last week to the lowest level in almost three years, suggesting the economy will add jobs for a fifth month in December, economists said. Initial claims in the government report out today are projected to fall to 365,000 for the week ended Saturday from 378,000 the prior week, according to the median estimate of 40 economists surveyed by Bloomberg News. It would be the first drop in three weeks. Claims totaled 353,000 in the last week of October, the lowest since January 2001. Production at factories jumped by the most in four years in November as manufacturers worked to keep pace with rising demand. Agilent Technologies Inc. is among the businesses starting to hire as the economy improves. Rising employment may help boost wages and spending, which will strengthen the expansion.
``Pent-up demand for hiring is growing,'' said Richard Berner, chief economist at Morgan Stanley in New York. The recovery is becoming ``broader and thus more sustainable.'' The Labor Department issues the jobless-claims report at 8:30 a.m. in Washington. The Conference Board may report its index of leading economic indicators, a gauge of economic activity over the next three to six months, increased 0.3 percent in November, the eighth month without a decline, according to the median forecast of economists surveyed. The index rose 0.4 percent in October after no change in September. The report is set for 10 a.m. Washington time. The Federal Reserve Bank of Philadelphia is forecast to report a December reading of 25 in its index of regional manufacturing. Positive readings signal growth. In November, the index was 25.9, close to a seven-year high of 28 a month earlier. The report is set for noon Washington time.
Labor Markets
In the jobless-claims report, economists' estimates ranged from 350,000 to 380,000. The report covers the same week in which the government surveys businesses to determine whether the economy gained or lost jobs this month. Claims figures near those projected for last week are consistent with a gain of 100,000 to 150,000 payroll jobs, according to economists at Lehman Brothers Inc. in New York. The December employment report is to be released on Jan. 9. Two-thirds of chief financial officers said their companies plan to boost hiring in 2004, according a survey of 236 executives conducted by Financial Executives International and Duke University's Fuqua School of Business and issued yesterday.
Increasing
The number of employees is expected to increase 2 percent next year, compared with their projections six months ago that there would be no increase, the survey showed. About 14 percent said their payrolls would shrink. ``We don't expect to do any more firings,'' said Ned Barnholt, chief executive of Palo Alto, California-based Agilent, the world's biggest maker of scientific testing equipment, in an interview last week. ``We will be selectively hiring back engineers and customer-support staff.'' After firing thousands of employees and undertaking other cost-saving steps, Agilent had a profit of $13 million in the quarter ended Oct. 31, following seven quarterly losses. Production in the nation's factories, utilities and mines rose 0.9 percent last month, the biggest increase since October 1999, the Federal Reserve reported Tuesday. ``Output is expanding briskly, and the labor market appears to be improving modestly,'' Fed policy makers said last week in announcing they were holding the target for their benchmark interest rate at a 45-year low of 1 percent. With inflation low and resources, such as factories and workers, not being fully utilized, the central bankers said they could keep the target rate low ``for a considerable period.''
57,000 Jobs
The economy added a smaller-than-expected 57,000 jobs last month, the fourth consecutive gain, according to figures from the Labor Department. The unemployment rate dropped to an eight-month low of 5.9 percent. An index of New York manufacturing employment rose this month to match the highest reading since its inception in July 1997, according to figures earlier this week from the New York Fed. The reading held above zero for a third month, signaling factory employment in that region was expanding. //www.bloomberg.com