UPDATE 1-US Treasury-"less bad" job loss "not good enough"

WASHINGTON, Sept 4 (Reuters) - Data on August U.S. payrolls shows the economy is starting to move in the right direction, but the Obama administration will consider modifying or extending its economic support programs if necessary, a senior U.S. Treasury official said on Friday.

Alan Krueger, the Treasury's assistant secretary for economic policy, told a news briefing that "less bad" job losses were "not good enough" for the Obama administration.

He said the administration was focused on trying to make existing stimulus programs work better, especially those focused on supporting the housing market. "If necessary we'll consider extending them but it's kind of a constant process of evaluation that's going on," he said.

The payroll data that showed a loss of 216,000 U.S. jobs in August and a 9.7 percent unemployment rate is consistent with White House forecasts and shows that "overall, what we're seeing is that we're headed in the right direction."

He credited the administration's $787 billion economic stimulus program with helping turn the tide against the recession, but said the economy had a long road to recovery.

"Many private sector economists think we will see GDP growth between two and three percent in the second half of the year. We would certainly welcome that, but would also caution that it will take time for labor markets to recover," Krueger added.

Krueger said he had particular concerns about the long-term unemployed, which remained at record levels in August, adding that the administration would continue to discuss with Congress extending unemployment benefits that are due to expire by year-end. (Reporting by David Lawder, Editing by Chizu Nomiyama)