The United States lost fewer private sector jobs in August than in the prior month while companies also planned fewer layoffs, suggesting modest improvement in the beleaguered U.S. labor market.
Tentative signs of recovery were also evident in data showing U.S. factories saw an increase in new orders in July for the fourth straight month, though the rise was smaller than economists had expected.
U.S. stocks were slightly lower on the day while the dollar rose against the yen and euro and U.S. government debt traded little changed.
Private employers cut 298,000 job positions last month, according to the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC.
That beat the 360,000 job losses seen in July, a month in which ADP initially said the economy shed 371,000 jobs.
"It's fairly good news. It could have been much worse," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
Outplacement consultancy Challenger, Gray & Christmas, Inc said planned layoffs at U.S. firms fell 21 percent in August, boosting hopes for improved consumer spending in the coming months.
Still, the cumulative number of job cuts since January hit 1.07 million, 60 percent higher than in the same eight-month period last year.
And economists polled by Reuters had expected a more modest tally of 250,000 private job losses last month.
"I would say the trend is improving but the bottom line is that the U.S. economy is still bleeding jobs," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York.
The government will release its more comprehensive payrolls report on Friday, and economists expect it to show that public and private employers cut 225,000 jobs in August, below July's tally of 247,000 job losses.
A separate report from the Labor Department showed U.S. nonfarm productivity rose at a 6.6 annual rate in the second quarter, the biggest increase since the third quarter of 2003.
FACTORY ORDERS UP, MORTGAGE APPLICATIONS DOWN
Other data showed new orders at U.S. factories rose 1.3 percent in July after gaining 0.9 percent the prior month, lifted primarily by transportation and civilian aircraft orders.
Economists polled by Reuters, though, were hoping for a 2.2 percent increase. And with transport equipment excluded, orders fell 0.7 percent from the previous month.
"I would be cautious about getting overly optimistic because the ex-transport number fell, so overall it's more of a disappointment," said Kathy Lien, director of currency research at GFT Forex in New York.
But Pierre Ellis, senior economist at Decision Economics in New York, said a sharp decline in petroleum prices in July contained new orders growth, adding "the ongoing, very gradual improvement in demand for manufactured goods continues."
Mortgage applications slid last week even as rates fell, with requests for loans to buy homes declining for the first time since early July, according to an industry group.
Fixed 30-year mortgage rates averaged 5.15 percent last week, above the record low of 4.61 percent set in March. But a year ago, this borrowing cost was 6.39 percent.
The view that the worst may have passed for the battered U.S. housing market is gaining traction. House prices plunged over the past three years, marking the housing market's worst crash since the Great Depression.
