Claims for Jobless Benefits Drop

WASHINGTON — The number of Americans filing new claims for unemployment benefits tumbled to a five-year low last week, while housing starts surged, the government said Thursday in a pair of new economic reports.

Initial claims for state unemployment benefits fell 37,000 to a seasonally adjusted 335,000, the lowest level since January 2008 and the largest weekly drop since February 2010, the Labor Department said.

The previous week’s figure was revised to show 1,000 more applications than previously reported.

While last week’s decline ended four consecutive weeks of increases, it is probably not the start of a new trend or a sign of a significant shift in labor market conditions, as claims tend to be volatile around this time of the year because of large swings in the model used by the department to iron out seasonal fluctuations.

A Labor Department analyst said the model had expected a large increase in claims last week, but the actual number of filings only showed a modest increase, leading to a big decline in the seasonally adjusted figure.

The four-week moving average for new claims, a better measure of labor market trends, fell 6,750 to 359,250, suggesting some improvement in underlying labor market conditions.

The claims data covered the week used for January’s nonfarm payrolls survey, to be released early next month. Job growth measured by the survey has been gradual, with employers adding 155,000 new positions in December. The unemployment rate held steady at 7.8 percent last month.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid increased 87,000 to 3.21 million in the week ended Jan. 5. The four-week average of the so-called continuing claims was the lowest since July 2008.

In a separate report, the Commerce Department said Thursday that groundbreaking to build new homes surged 12.1 percent last month to a 954,000-unit annual rate.

It was the fastest pace since June 2008, supporting the view that housing is poised to provide a substantial boost to the United States economy. But data for housing starts can be volatile and is sometimes subject to large revisions. The government revised downward its estimate for November housing starts, for example, to a 851,000-unit rate from the originally reported 861,000.

Some of the strength in December’s reading for housing starts came from a 20.3 percent surge in multiunit construction; that component is especially volatile.

Permits for future home construction edged higher to a 903,000-unit rate, the quickest since July 2008. Groundbreaking for single-family homes, the largest segment of the market, climbed 8.1 percent last month to a 616,000-unit pace.

Article source: http://www.nytimes.com/2013/01/18/business/economy/claims-for-jobless-benefits-drop.html?partner=rss&emc=rss