April 5 (Bloomberg) -- More Americans filed first-time claims for unemployment benefits last week, while the number of people on jobless rolls remained at a level that indicates strength in the job market.

Initial jobless claims increased by 11,000 in the week ended March 31 to 321,000, more than economists had forecast, Labor Department figures showed today. The four-week moving average, a less-volatile measure, fell to 315,750 from 317,250.

Construction and housing-related businesses and auto makers are trimming staff while other employers are holding on to workers to meet demand, economists said. Tomorrow's March employment report, forecast to show growth in jobs and wages, may reinforce optimism that consumer spending will stay buoyant.

``It's a sign of labor market stability,'' said Michael Gregory, a senior economist at BMO Capital Markets in Toronto. ``The effect of weakness in housing and manufacturing is very muted.''

The number of people continuing to collect state unemployment benefits fell to 2.492 million in the week that ended March 24, the lowest since January, from 2.517 million in the prior week.

Economists' Forecasts

Economists had forecast initial jobless claims would rise to 315,000 from 308,000 originally reported for the prior week, according to the median estimate in a Bloomberg News survey of 36 economists. Estimates ranged from 305,000 to 320,000.

The figure for the prior week was revised to 310,000 in today's report.

First-time claims averaged 319,000 a week last month, compared with an average of 313,000 a week in all of 2006, the lowest in six years.

The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, held at 1.9 percent in the week ended March 24, today's report showed.

Twenty-four states and territories reported an increase in new claims, while 28 reported a decrease, and one had no change, the Labor Department said.

Today's report comes ahead of the Labor Department's March employment report that may show employers added 133,000 jobs in March, improving on a 97,000 gain the previous month, according to the median estimate in a Bloomberg survey.

Payroll Report

Tomorrow's payroll report may also show the unemployment rate increased to 4.6 percent last month from 4.5 percent, according to the survey median.

Initial jobless claims, reported weekly, reflect firings and usually fall as job growth increases. While the numbers together are a good gauge of the labor market's strength, the correlation has weakened recently.

Figures from other sources also point to a resilient employment scenario. Companies added 106,000 jobs in March, after a revised gain of 65,000 that was more than initially estimated, ADP Employer Services said yesterday. The report is based on data from 364,000 businesses with about 22 million workers on their payrolls.

The share of Americans who said jobs are plentiful rose last month to the highest since August 2001, a Conference Board survey showed last week. The proportion who said jobs are hard to get also increased, the report said.

Bernanke's Forecast

With housing in a downturn and businesses pulling back on spending, a healthy labor market is critical to Federal Reserve Chairman Ben S. Bernanke's forecast that the economy will grow at a ``moderate'' pace this year.

``Our economy is fundamentally sound,'' St. Louis Federal Reserve Bank President William Poole said in a speech to the National Association for Business Economics New York Chapter on April 2. ``Putting aside near-term uncertainties, mostly related to housing and housing finance, economic activity is growing at approximately the same rate as potential.''

Job cuts announced by employers fell last month from a year earlier, according to a survey by Challenger, Gray & Christmas Inc. While total firings slowed, the report said housing-related businesses planned to dismiss more than four times as many employees in the first quarter as in the same period last year.

Mounting defaults on subprime mortgages -- loans to people with poor or limited credit histories -- may throw more homes onto the market and make builders wary of taking on new projects and hiring construction workers, economists said. Housing- related firms also may pare staff.

New Century Financial Corp., which this week became the biggest subprime mortgage company to go bankrupt, said more than half of its 3,200 employees will be fired. The lender, based in Irvine, California, filed for Chapter 11 protection on April 2 after it was overwhelmed by defaults.

Circuit City Stores Inc., the second-largest U.S. electronics retailer, last week said it fired 3,400 of its highest-paid sales people and will hire replacements who are willing to work for less.

To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net

Last Updated: April 5, 2007 11:43 EDT