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Series of reports stir hopes of brighter job market

WASHINGTON - A handful of economic reports released Thursday raised hopes for an improving job market with fewer layoffs and more hiring.

Productivity slowed more than initially estimated in the first quarter of the year, a sign that employers are struggling to squeeze more work out of leaner staffs. The lower figure was expected after the government last week revised its growth estimate for the first quarter.

The number of people filing first-time jobless claims dipped for a second week, though it remains elevated for the year.

And an index that tracks activity in the U.S. service sector showed job growth in May - the first time in 28 months.

Economists predict Friday's employment report will show that 513,000 net jobs were added in May. Still, a majority of those jobs are expected to be temporary census work.

"While we will see a period of job growth, it is going to take a long time to get back the jobs we lost," said Mark Zandi, chief economist at Moody's Analytics He said he expects it will take until 2013 for the economy to create enough jobs to recoup the 8 million jobs lost during the downturn.

Jennifer Lee, an economist at BMO Capital Markets, said: "The jobs data so far this morning haven't screamed strength, but they continue to set an encouraging tone."

Orders to U.S. factories climbed in April, pulled up by a surge in demand for commercial aircraft, the Commerce Department said. But the overall increase was smaller than the uptick in March. And excluding transportation, orders actually fell in April 0.5 percent - the poorest showing in 13 months.

Americans spent with caution in May after a tepid April, according to the International Council of Shopping Center index released Thursday. Cool weather and a late Memorial Day weekend dampened May spending. But analysts also cited high unemployment, stock market jitters and the dwindling of government-funded rebates on energy-efficient appliances.

Productivity advanced at an annual rate of 2.8 percent in the January-March period, the Labor Department said Thursday. That is the slowest pace in a year and lower than the 3.6 percent rate the government initially reported last month. Labor costs declined, though less than initially estimated. A separate Labor report yesterday showed layoffs fell for a second week, dipping by 10,000 to 453,000 last week. - AP

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