US private sector adds 176,000 jobs; unemployment claims fall

WASHINGTON (REUTERS) - US private employers added 176,000 jobs last month and new claims for jobless benefits fell last week, which could bolster expectations the US Federal Reserve will begin winding down a bond-buying stimulus programme this month.

Payrolls processor Automatic Data Processing (ADP) said on Thursday private sector employment expanded less than in July, but analysts said the data still backed the consensus view that a more comprehensive employment report, due on Friday, would show improvement.

"(It's) enough to reinforce expectations that the Fed will begin to taper its asset purchases," said Mr Paul Ashworth, an economist at Capital Economics in Toronto.

The ADP data comes one day before the US government's report on August non-farm payrolls, which investors will scour in hopes of divining the future direction of the Fed's massive asset-buying program.

The Fed is now weighing when to pull back on its purchases of US$85 billion (S$108.6 billion) per month in Treasuries and mortgage-backed securities. Policymakers want to see the unemployment rate closer to 6.5 per cent from its current 7.4 per cent.

Separately, the Labour Department said the number of Americans filing new claims for jobless benefits fell 9,000 last week to 323,000, a near five-year low. The four-week moving average for new claims fell to its lowest level since October 2007, before the 2007-2009 recession began. This measure, which is closely followed because it irons out week-to-week volatility, dipped 3,000 to 328,500.

The report has no direct bearing on Friday's monthly employment report, but it could reinforce confidence that the labour market is posting a slow yet steady comeback.

Still, the US economic recovery has largely skirted many Americans, who are frustrated over a slow pace of wage gains in recent years.

A separate Labour Department report showed US labour costs were flat in the second quarter, a sign of minimal inflationary pressures in the economy that could fan concerns inflation is too low.