* Jobs data shows fewer workers laid off in July
* AIG up 19 percent after 1st profit in seven qtrs
* Futures jump: S&P 11.30 pts, Dow 90 pts, Nasdaq up 24.50 (Updates with jobs data, changes quote)
By Angela Moon
NEW YORK, Aug 7 (Reuters) - Wall Street was set for a higher open on Friday after the government reported fewer workers were laid off in July, providing fresh evidence of an economic recovery and the sustainability of a recent market run-up.
U.S. employers cut 247,000 jobs in July, far less than expected and the least in any month since last August, according to the Labor Department, suggesting the recession was abating.
The July unemployment rate eased to 9.4 percent from 9.5 percent the prior month, the first time the rate had fallen since April 2008.
Burt White, chief investment officer for LPL Financial in Boston, said that combined with earlier reports on the manufacturing sector and gross domestic product, the latest data provided further validation for hopes of recovery.
"Now (recovery) is not just a theory. We're starting to see it manifest itself into employment, inventories and growth," White said. "We think that will ultimately manifest itself into a stock market that continues to move upwards."
S&P 500 index futures were up 11.30 points and below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 90 points, while Nasdaq 100 futures surged 24.50 points.
Adding to the upbeat mood, shares of American International Group Inc jumped 19 percent at $26.78 premarket after the embattled insurer reported its first profit in seven quarters.
Investors are keen for any insight into a healthy AIG, which was rescued by U.S. taxpayers during the financial crisis. At Thursday's close, the stock was up nearly 70 percent since the beginning of the week.
Wall Street's second day of declines on Thursday came on the heels of a four-day rally that pushed U.S. indexes to close at their highest levels since last fall. Investors trimmed long positions in risky assets, including stocks before the non-farm payrolls report.
Despite the pullback, the broad S&P 500 is up 47.4 percent from its 12-year closing low in early March, driven by a string of economic data suggesting a recovery and an earnings season with most S&P 500 companies beating expectations.
In a boost for the struggling auto sector, the Senate approved a $2 billion extension of the "cash for clunkers" incentive program late Thursday and sent the measure to the White House.
Shares of Ford Motor Co were up 3.5 percent at $8.35 before the bell.