By Lucia Mutikani Lucia Mutikani   – Thu Oct 7, 5:45 pm ET

WASHINGTON (Reuters) – New claims for jobless benefits hit a near three-month low last week, suggesting some let up in the labor market’s distress but likely not enough to keep the Federal Reserve from easing monetary policy further.

Initial claims for state unemployment benefits dropped 11,000 to 445,000, the lowest since the July 10 week, the Labor Department said on Thursday. Financial markets had expected claims to edge up to 455,000.

“The fact that claims are coming down in such a way suggests the labor market has a firmer underpinning than we may know,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. Still, he added: “It would not hurt if the Fed put another log on the fire.”

Sales at U.S. retail chains last month also showed unexpected strength. U.S. same-store sales rose 2.8 percent, according to Thomson Reuters data that tracks 28 top chains, beating analysts’ estimates for a 2.1 percent increase.

Sales, which rose for the 13th straight month, were boosted by back-to-school buying.

U.S. stocks opened higher on the reports, but ended down. Prices for shorter-dated U.S. Treasuries rose slightly on expectations of further monetary easing by the Fed.

The U.S. central bank’s policy-setting committee meets on November 2-3. The Fed, which cut overnight interest rates to near zero in December 2008, has already pumped $1.7 trillion into the economy by buying mortgage-related and government bonds.

The prospect of further bond purchases pushed the dollar down to a 15-year low against the Japanese yen and an all-time low against the Swiss franc on Thursday.

While financial markets appear to have priced in a second phase of quantitative easing, there is no consensus among policymakers on the need for more stimulus.

Kansas City Fed President Thomas Hoenig, who has consistently dissented from the U.S. central bank’s easy money policies, said he opposed any additional easing. His counterpart at the Dallas Fed, Richard Fisher, said he wanted to hear all arguments before making a decision.

Financial markets will likely take a further cue from a U.S. government report on September employment on Friday.

Nonfarm payrolls were likely unchanged last month as more temporary U.S. Census jobs ended and cash-strapped state and local governments laid off workers, even as private hiring picked up, according to a Reuters survey.

The initial benefit claims data has little bearing on the closely followed monthly jobs report because it covered a week that fell outside the report’s survey period.

DOWNSIDE RISK TO PAYROLLS

There is a risk employment declined again in September after an independent report on Wednesday showed private employers unexpectedly cut jobs during the month. Many analysts, however, have not changed their forecasts.

“The ADP is very reliable and as good as that is among the best of the indicators that one could possibly have, it has been off, and consistently off, this year by an average of seventy-five thousand per month,” said Steven Wieting, an economist at Citigroup on New York.

Although the longest and deepest recession since the 1930s ended in June 2009, the recovery has been unusually sluggish and the economy is still far from full health.

The International Monetary Fund on Wednesday cut its forecast of U.S. economic growth for 2011 to 2.3 percent from its July projection of 2.9 percent.

The sickly economy, characterized by 9.6 percent unemployment rate expected to rise to 9.7 percent in Friday’s report, is making Americans increasingly despondent about their future, a factor that could determine the outcome of midterm congressional elections on November 2.

Opinion polls suggest the Democratic Party’s hold on Congress will weaken, with Republicans expected to take over the U.S. House of Representatives.

But the labor market is showing some improvement. The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 3,000 to 455,750, the lowest level since the July 24 week.

The second straight week of declines in new applications for unemployment benefits pushed them further away from a nine-month high of 504,000 touched in mid-August. Claims are now in the upper end of the 400,000 to 450,000 range that analysts say is normally associated with labor market stability.

The number of people still receiving benefits after an initial week of aid dropped 48,000 to 4.46 million in the week ended September 25, the lowest since June 26.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman and Padraic Cassidy)

By CARA ANNA, Associated Press Writer Cara Anna, Associated Press Writer   – 13 mins ago

BEIJING – China rushed to keep an oil spill from reaching international waters, while an environmental group tried to assess if the country’s largest reported spill was worse than has been disclosed.

Crude oil started pouring into the Yellow Sea off a busy northeastern port after a pipeline exploded late last week, sparking a massive 15-hour fire. The government says the slick has spread across a 70-square-mile (180-square-kilometer) stretch of ocean.

The cause of the blast was still not clear Wednesday. The pipeline is owned by China National Petroleum Corp., Asia’s biggest oil and gas producer by volume.

Images of 100-foot-high (30-meter-high) flames shooting up near part of China’s strategic oil reserves drew the immediate attention of President Hu Jintao and other top leaders. Now the challenge is cleaning up the greasy brown plume floating off the shores of Dalian, once named China’s most livable city.

The environmental group, Greenpeace China, shot several photographs at the scene Tuesday before their team was forced to leave. They showed oil-slicked rocky beaches, a man covered in thick black sludge up to his cheekbones, and workers carrying a colleague covered in oil away from the scene.

The state-run Xinhua News Agency reported a 25-year-old firefighter, Zhang Liang, drowned Tuesday after a large wave pushed him into the sea amid the clean up. Another man who also fell in was rescued. It was not immediately clear if either were the ones shown in the Greenpeace photos.

Activists said it was too early to tell what impact the pollution might have on marine life.

Officials told Xinhua they did not yet know how much oil had leaked, but China Central Television reported no more pollution, including oil and firefighting chemicals, had entered the sea Tuesday. It was not clear how far the spill was from China’s closest neighbor in the region, North Korea.

Dalian’s vice mayor, Dai Yulin, told Xinhua 40 specialized oil-control boats would be on the scene along with hundreds of fishing boats. Oil-eating bacteria were also being used in the cleanup.

“Our priority is to collect the spilled oil within five days to reduce the possibility of contaminating international waters,” he said.

But an official with the State Oceanic Administration has warned the spill will be difficult to clean up even in twice that amount of time.

The Dalian port is China’s second largest for crude oil imports, and last week’s spill appears to be the country’s largest in recent memory.

“In terms of what is known to the public, this is definitely the biggest,” said Yang Ailun, spokeswoman for Greenpeace China.

“Government and business leaders have been telling the media that there’s no environmental impact. From Greenpeace’s perspective, that’s very irresponsible,” she added. “It’s too early to tell. Oil is still floating around.”

While the Chinese public has not seized on the accident as its own version of the massive BP spill in the United States, warnings over the country’s increasing dependence on oil were clear.

The International Energy Agency said Tuesday that China has overtaken the United States as the world’s largest energy consumer, using the equivalent of 2.252 billion tons of oil last year. China immediately questioned the calculation.

LORAIN — The Ohio Department of Insurance could revoke the license of a Lorain-based bondswoman they claim submitted fake and forged renewal documents to courts in three counties.

The Ohio Department of Insurance claims Elizabeth R. Large, of Cleveland, who owns Large Bonds Bail in Lorain, forged and sent Ohio Department of Insurance bail bond renewal letters to courts to Licking and Lorain county courts and Ashland Municipal Court.

Large opened Large Bonds Bail, 600 Broadway Ave., in 2006, and said she did not submit the documents and has never posted bonds in Ashland or Licking county.

The Department of Insurance has given Large until July 29 to request a hearing, said Jarrett Dunbar, a department public information officer. Large’s attorney Timothy Rankin said on Wednesday he was in the process of filing for a hearing.

At the time the documents were submitted through the mail, Large’s license had already been renewed, Rankin said.

“There’s no evidence to support the allegations,” said Rankin, who also says he conducted an investigation into the allegations. “She was fully licensed at the time and had a valid license. There’s no reason to do what they’re alleging she did.”

During the state’s investigation, Large maintains her license to post bonds, according to the Ohio Department of Insurance.

HOUSTON – HCC Insurance Holdings Inc. said Friday that R. Matthew Fairfield has resigned as CEO of the company’s international operations and it has appointed two in his place.

Thibaud Hervy and Philippe Vezio will take over the post together.

Hervy joined with the company in 1999 and has supervised the international portfolio of business. Vezio joined HCC Insurance in 2000 and ran the claims department.

They will be based at the company’s headquarters in Barcelona.

Shares of HCC closed down 60 cents, or 2.4 percent, to $24.95.