Oct. 7 (Bloomberg) -- U.S. discount, grocery, restaurant and specialty chains hired a larger percentage of applicants in August for the eighth straight month, signaling the economy is stabilizing and may grow next year, Kronos Inc. said.

Three of every 100 applications resulted in a hire in August, the highest level since merchants hired four of every 100 in December, according to Kronos’s analysis of 1.4 million job applications to 68 retailers. That level was slightly improved from a hiring rate of 2.99 in July.

The increase “makes us confident that our numbers will continue to be stable, slowly increase, and then the general economy will follow that several months later,” Robert Yerex, Kronos’s chief economist, said by telephone yesterday from Beaverton, Oregon. “It’s like turning the Titanic, it takes a while.”

This is the second monthly retail labor index that Kronos has issued publicly. The closely held Chelmsford, Massachusetts- based company makes software that businesses use to process hiring, payroll and scheduling and to manage employees. It had 2008 revenue of about $715 million, Laura Souza, a company spokeswoman, said yesterday.

The Kronos index “sounds generally consistent with the overall picture of the U.S. labor market,” Adam York, an economist at Wells Fargo Securities in Charlotte, North Carolina, said yesterday in a telephone interview. “Retailers certainly haven’t been spared in this downturn.”

Chains that use Kronos products, including discounters, grocers, restaurants and home-improvement stores, account for about 15 percent of U.S. retail jobs, the company said. The company won’t identify which clients are part of the survey, Souza said.

‘Stabilization’

Yerex, 50, said Kronos found “stabilization” in hiring of cashiers, merchandise stockers and other frontline workers in August, echoing improvements by some economic indicators.

U.S. service industries expanded in September for the first time in a year indicating the emerging recovery spread from housing and factories to the broader economy.

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 50.9, higher than forecast, from 48.4 in August, the Tempe, Arizona-based group said Oct. 5. Fifty is the dividing line between expansion and contraction.

The U.S. unemployment rate rose to 9.8 percent in September, the highest since 1983, from 9.7 percent in August. Retail payrolls decreased by 38,500, following a drop of 8,800 in August, the U.S. Labor Department said Oct. 2. Retail jobs fell by 3.8 percent from the same period last year.

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net

Last Updated: October 7, 2009 00:00 EDT