Initial jobless claims fall for second week; housing data mixed
U.S. jobless claims fell for a second week, suggesting growth in the labor market, but data on home construction showed that sector remains stressed even as the economy shows signs of a pickup.
Initial jobless claims fell 3,000 last week to a seasonally adjusted 420,000, the Labor Department said Thursday, in line with forecasts. The four-week moving average of claims, considered a better measure of labor market trends, touched a fresh two-year low.
A separate report from the Commerce Department showed that November housing starts rose 3.9% from October to a seasonally adjusted annual rate of 555,000 units. However, permits for future home construction dropped to a 11/2-year low.
Economist welcomed the second week of decline in initial jobless claims. They said it bode well for employment growth, but remained insufficient to bring down a 9.8% unemployment rate.
“This confirms the downtrend we have enjoyed in the past month, which is consistent with a six-figure monthly increase in payrolls going forward,” said Richard DeKaser, an economist at the Panthenon Group in Boston.
October’s housing starts were revised up to a 534,000-unit annual pace from the previously reported 11/2-year low rate of 519,000 units.
Despite last month’s pickup in residential construction, housing remains weak as high unemployment weighs on demand and homeowners’ ability to hang on to their properties, lagging behind an acceleration in broader economic activity.
A survey Wednesday showed sentiment among home builders was mired at record low levels this month, suggesting that residential construction will again be a drag on gross domestic product growth in the fourth quarter.
New building permits in November fell 4% from October to a 530,000-unit pace, the lowest since April 2009, after a 0.9% increase in October. Permits were dragged down by a 23% plunge in the volatile multi-family segment. Permits for single-family homes rose 3% last month.
Analysts had expected overall building permits to rise to a 560,000-unit pace in November.
Groundbreaking last month was lifted by a 6.9% rise in single-family home construction. Starts for the multi-family segment, however, fell 9.1%. New home completions tumbled 14.1% to a record low 513,000 units in November.