The Federal Reserve will probably trim its monthly asset purchases by almost a third in September if the labor market continues to strengthen, according to Joseph LaVorgna, Deutsche Bank AG’s chief U.S. economist.

The first reduction will be $25 billion, consisting of $10 billion fewer mortgages and $15 billion of Treasuries. This will bring monthly purchases down to $60 billion from the current level of $85 billion, LaVorgna wrote in note to clients.

“Policy makers are still on track to taper at the September meeting,” according to the New York-based LaVorgna. “This assumes the downtrend in jobless claims persists and that we will see a step-up in hiring this summer.”

The Fed may complete the reductions by the end of the year, with two successive $30 billion cuts during meetings in October and December, according to Deutsche Bank, one of the 21 primary dealers that trade directly with the central bank.

Fed Chairman Ben Bernanke said May 22 that policy makers could consider slowing the bond-buying program within “the next few meetings” if officials are confident that improvement in the economy will be sustained.

Weekly applications for jobless benefits have fallen to 354,000 from 382,000 12 months ago and from 418,000 two years ago, Labor Department figures showed on May 30.

The Fed may raise its benchmark interest rate by late 2014, according to Deutsche Bank.