U.S. job market deterioration has slowed-US Treasury

WASHINGTON (Reuters) - Deeper-than-expected U.S. job losses in September were disappointing, but other recent economic data suggests the U.S. economy is expanding, a top U.S. Treasury official said on Friday.

"Recoveries don't move in straight lines. Not all of the incoming data point in the same direction," Treasury Chief Economist Alan Krueger told reporters after a Labor Department report showing employers cut 263,000 non-farm jobs last month.

"We do see clear signs the labor market conditions are not deteriorating as rapidly as they were in the first half of the year, despite the disappointing news for the month of September," Krueger said.

Monthly job losses averaged 256,000 in the third quarter, down from 428,000 in the second and 691,000 in the first, Krueger said.

But "less bad is not good enough ... I don't think it will feel like a full recovery until we see the job market adding jobs," Krueger told reporters.

"Solid" U.S. consumption growth and an expansion in manufacturing in September show the economic recovery package passed by Congress earlier this year has put the breaks on a steep economic decline, he said.

While the U.S. labor market still "poses significant challenges," there is no reason yet to decide whether a second U.S. economic stimulus package is needed, he said.

Companies tend not to add jobs until economic growth has resumed and the Obama administration is focused on implementing the first stimulus package "so that more jobs are being added than subtracted," Krueger said.

(Reporting by Doug Palmer; Editing by Andrea Ricci)