NEW YORK - 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.
U.S. employers cut 298,000 private sector jobs 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.
Economists polled by Reuters expected a more modest tally of 250,000 job losses in August.
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.
U.S. stock futures added to losses and the dollar extended gains against the euro and yen after the report.
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.
Also on Wednesday, outplacement consultancy Challenger, Gray & Christmas, Inc said planned layoffs at U.S. firms fell 21 percent in August, stoking hopes for improved consumer spending in the coming months.
The data showed, however, that the cumulative number of job cuts rose to 1.07 million between January and August, 60 percent higher than the same period last year.
A separate report from the Labor Department showed U.S. nonfarm productivity rose at a 6.6 annual rate in the second quarter, faster than the initial 6.4 percent estimate.
That was the biggest increase since the third quarter of 2003.
In other U.S. economic data on Wednesday, mortgage applications slid last week even as mortgage rates edged lower, with requests for loans to buy homes declining for the first time since early July, an industry group said on Wednesday.
Fixed 30-year mortgage rates averaged 5.15 percent last week, down 0.09 percentage point. This was still above the record low of 4.61 percent set in March yet a year ago this borrowing cost was 6.39 percent.
Stability has seemingly returned to the three-year housing market that has endured the deepest crash since the Great Depression. The view that the worst may have passed is gaining traction.