Jobless Claims Decline, While Home Sales Rise

The number of Americans applying for unemployment benefits fell 23,000 last week to a seasonally adjusted 340,000, a level consistent with firm job growth.

And sales of new homes rose in April to the second-highest level since summer 2008, while the median price for a new home hit a high.

The Labor Department said on Thursday that the less volatile four-week average of jobless claims declined just 500 to 339,500. That is close to the five-year low of 338,000 reached in the first week of May. The four-week average is 9 percent lower than last November.

“The underlying story in jobless claims continues to be one of gradual improvement,” Bricklin Dwyer, an economist at BNP Paribas, wrote in a research report.

Unemployment claims are a proxy for layoffs. The decline in claims has coincided with steady job growth over the last six months. Since last November, employers have added an average 208,000 jobs a month. That is up from just 138,000 jobs a month in the previous six months.

Still, much of the improvement has come from fewer layoffs, not robust hiring. Employers laid off just 1.7 million workers in March, only slightly above the 12-year low reached in January. Overall hiring remains far below levels before the recession.

More than 4.7 million Americans were receiving unemployment benefits the week that ended May 4, down 23 percent from nearly 6.2 million a year earlier.

The United States still has 2.6 million fewer jobs than when the recession began in December 2007. The unemployment rate has fallen to a four-year low of 7.5 percent, from 10 percent in October 2009. Some of the decline is a result of many people giving up looking for work. The government counts people as unemployed only if they are searching for a job.

The Commerce Department said Thursday that sales of new homes rose to a seasonally adjusted annual rate of 454,000 in April. That was up 2.3 percent from March and slightly below 458,000 in January.

January and April had the fastest sales since July 2008.

The median price of a home sold in April was $271,600, the highest level on government records dating from 1993. The April price was 8.3 percent higher than in March and 13.1 percent higher than a year earlier.

Steady job creation and mortgage rates near record lows are encouraging more Americans to buy homes.

With the April increase, sales are now 29 percent higher than a year ago, but they are still below the 700,000 economists consider healthy.

The strength in April was led by a 10.8 percent increase in sales in the West. Sales in the South were up 3 percent, but sales fell 16.7 percent in the Northeast and 4.8 percent in the Midwest.

Sales of previously owned homes rose in April to a seasonally adjusted annual rate of 4.97 million, the highest level in three and a half years.

Greater demand, along with fewer homes for sale, is also increasing prices in most markets and encouraging more construction.

Applications for permits to build homes rose in April to the highest level in nearly five years. While construction of new homes and apartments slipped a bit in April, the decline occurred a month after construction topped one million for the first time since June 2008.

Article source: http://www.nytimes.com/2013/05/24/business/economy/jobless-claims-decline-while-home-sales-rise.html?partner=rss&emc=rss