Dec. 31 (Bloomberg) -- The number of Americans filing first- time applications for state unemployment benefits fell to 339,000 last week, the lowest in almost three years, suggesting job prospects are improving.

Initial jobless claims declined by 15,000 in the week that ended Saturday from 354,000 a week earlier, the Labor Department said in Washington. Last week's filings were the fewest since the week ended Jan. 20, 2001.

Businesses such as America West Airlines and Cypress Semiconductor Corp. are planning on hiring more employees in 2004 as demand improves. The U.S. economy, the world's largest, is forecast to grow 4.4 percent next year, the best performance since 1999, according to Bloomberg News survey results.

``The recovery is sustainable and companies are seeing that,'' said Maria Forres, an economist at Griffin Kubik Stephens & Thompson in Chicago. More corporate investment ``is the first sign that business are confident and jobs are the second step.''

Economists had expected claims would drop to 350,000, based on the median of 22 forecasts in a Bloomberg News survey, from the 353,000 initially reported for the week earlier. Forecasts ranged from 340,000 to 360,000.

The benchmark 10-year Treasury note fell 3/32 point, pushing up the yield 1 basis point to 4.27 percent, amid signs of stronger economic growth.

The four-week moving average of claims, a less-volatile indicator, fell to 355,750 from 362,250.

The number of people continuing to collect state jobless benefits rose to 3.315 million in the week that ended Dec. 20 from 3.234 million a week earlier. The four-week average of continuing claims dropped to 3.293 million, the lowest since the week ended Sept. 22, 2001.

Help Wanted

The insured employment rate, which tends to track the U.S. jobless rate, held at 2.6 percent in the week ended Dec. 20. The Labor Department also said 26 states and territories reported an increase in new claims, while 26 reported a decrease. One reported no change. These data are reported with a one-week lag.

An index measuring the volume of help-wanted advertising in 51 major U.S. newspapers climbed in November for the first time since June, a report from the Conference Board this week showed.

``The labor market is finally sparking to life,'' said Ken Goldstein, a Conference Board economist, in a report.

Monster Worldwide Inc., the largest online job Web site, expects a 20 percent to 25 percent increase in job listings in 2004, partly because of an increase in information technology postings, Chief Executive Officer Andrew McKelvey said in a televised interview with Bloomberg News last week.

Employment Outlook

``Job listings are coming back,'' said McKelvey. Information technology listings have recently ranged between 20,000 and 25,000 compared with a low of 10,000 in the past few years, he said. Those listings had been as high as 150,000 before the recession, he said.

The economy added jobs for a fourth month in November and the unemployment rate dropped to an eight-month low of 5.9 percent, the Labor Department said earlier this month.

Consumers are more optimistic this month about the outlook for employment than they are about the current job market. Consumer confidence last month slipped from a 14-month high as more Americans said jobs are hard to find, a report from the New York-based Conference Board today showed. Still, 21.7 percent said they expected more jobs would become available in the next six months, the most since April 2002.

The economy is projected to grow at a 4 percent annual pace this quarter following an 8.2 percent rate from July through September that was the strongest in almost 20 years, according to the median estimate of economists surveyed earlier this month by Bloomberg News. It's forecast to grow 4.4 percent in 2004, the most since it expanded 4.5 percent in 1999, according to the survey.

The expanding economy will probably add an average of 200,000 jobs a month in 2004, according to a forecast by UBS' O'Sullivan.

America West

America West, a unit of America West Holdings Corp., announced last week it plans to hire more than 1,000 and lease four additional planes as part of a plan to boost the number of passengers it carries by 10 percent next year. The additions would boost its payroll by at least 7.7 percent.

Thurman J. Rodgers, chief executive of Cypress Semiconductor, said last week the company intends to expand payrolls by 15 percent over the next two years. The plans are ``quite modest,'' said Rodgers in a televised interview with Bloomberg News.

Cypress, based in San Jose, California, which makes chips for mobile phones, video game consoles and consumer products such as digital cameras, said the number of cellular phone sales this quarter has risen to about 185 million from an average of 110 million to 120 million.

Last Updated: December 31, 2003 09:26 EST