US jobless claims fall, home building rises

February 17, 2012

New claims for US unemployment benefits fell last week to their lowest level since March 2008, official data showed Thursday in a fresh sign of improvement in the troubled job market.

Initial jobless claims fell to 348,000 in the week ending February 11, down 3.6 percent from the prior week, the Labor Department reported.

The decline in claims was much better than the 365,000 new filings analysts had expected.

New jobless claims have now returned to the level of March 2008, when Wall Street investment bank Bear Stearns declared bankruptcy amid recession.

The Labor Department's four-week moving average of initial jobless claims, which helps to smooth out volatility in the weekly numbers, fell to 365,250.

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"Claims have been falling since the middle of last year, and there is no reason to think the declining trend is about to level out," said Ian Shepherdson at High Frequency Economics

"Rising corporate and consumer sentiment and the clear and sustained improvement in bank credit conditions for smaller firms is making it easier for businesses to hold onto people whom they might previously have had to let go."

In January, the unemployment rate fell for the fifth straight month, to 8.3 percent, the lowest level since February 2009, thanks to a surge in job creation.

The economy added 243,000 net new jobs in broad-based gains and wages rose 0.2 percent, prompting analysts to revise their forecasts for first-quarter economic growth.

Home building picks up

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US home building picked up pace in January from a month before, confirming an upsurge in the housing construction sector that began in the fourth quarter of last year, the Commerce Department reported Thursday.

Construction was initiated on new homes at an annual pace of 699,000 units, up from 689,000 in December and slightly above the average for the last three months.

The average for the previous three months was 615,000 units.

The Commerce Department said that the year-on-year rise in January was 9.9 percent.

Underpinning the trend is solid growth in the number of single-family housing starts, which have picked up steadily as well.

"The new home sales numbers have not yet responded but builders seem confident that if they build, buyers will come," said Ian Shepherdson at High Frequency Economics.

Reuters

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