Lackluster economy shows stronger pulse

Thu Sep 6, 2012 1:01pm EDT
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By Jason Lange

WASHINGTON (Reuters) - Companies added staff in August at the fastest clip in five months and a gauge of employment in the service sector also improved, upbeat signals for a struggling labor market.

Another report on Thursday showed new claims for jobless benefits fell last week to the lowest level in a month.

The data is the latest to hint the U.S. economy is gaining a bit of steam, and it raised chances the government's more comprehensive jobs report on Friday could be stronger than economists expect.

But the data did not alter the view that economic growth is too weak to make a big dent in the still-high unemployment rate, keeping alive chances the Federal Reserve could launch a new bond buying program as soon as next week.

"We wouldn't expect this improvement to persuade the Fed to hold fire next week," said Paul Ashworth, an economist with Capital Economics in Toronto.

The weak U.S. economy is center stage in the presidential election campaign.

President Barack Obama, who is looking very vulnerable ahead of Election Day on November 6, will lay out his economic vision in a high-stakes speech on Thursday night closing out the Democratic Party's national convention.

Analysts say any bounce he might get could be quashed by a weak jobs report on Friday.   Continued...

A man holds his briefcase while waiting in line during a job fair in Melville, New York July 19, 2012. REUTERS/Shannon Stapleton