Housing, labor data provide upbeat signs on US economy



Reuters

Published — Thursday 17 January 2013

Last update 17 January 2013 11:42 pm

| نسخة PDF Print News | A A

WASHINGTON: The number of Americans filing new claims for unemployment aid hit a five-year low last week and residential construction surged in December, the latest signs of underlying strength in the economy.
Initial claims for state unemployment benefits fell 37,000 to a seasonally adjusted 335,000, the lowest level since January 2008, the Labor Department said. It was the largest weekly drop since February 2010 and ended four straight weeks of increases.
The drop might not signal a material shift in labor market conditions as claims tend to be very volatile around this time of the year. This is because of large swings in the model used by the department to iron out seasonal fluctuations.
"Having taken a pinch of salt, however, we would suggest that the trend in claims generally show no pickup in layoff activity around the turn of the year," said John Ryding, chief economist at RDQ Economics in New York.
A separate report from the Commerce Department showed housing starts jumped 12.1 percent last month to their highest level since June 2008. Permits for future home construction were also the highest in about 4-1/2 years.
While warm weather likely helped, the data was confirmation of the improving housing market tone, and gains in home building were across all four regions. Housing is no longer a drag on the economy and residential construction is expected to have contributed to growth last year for the first time since 2005.
It is expected to be the key driver this year. The reports came on the heels of data this week showing solid retail sales and manufacturing growth in December.
"This has been a great week for economic news," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
The fairly upbeat data helped to lift US stocks to a five-year high. US Treasury debt prices fell and the dollar was marginally weaker against a basket of currencies.
But the outlook for the economy remains shaky. A third report showed factory activity in the US mid-Atlantic region contracted this month as new orders tumbled, pointing to a slowdown in manufacturing activity.
The Philadelphia Federal Reserve Bank said its business activity index fell to -5.8 from 4.6 in December. A reading below zero indicates contraction in manufacturing in eastern Pennsylvania, southern New Jersey and Delaware.
"Manufacturing has slowed but it's still growing. I'm not going to read too much into this until I see other regional surveys," said Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh.
The four-week moving average for new jobless 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 survey week for January's nonfarm payrolls. Job growth 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.

What's happening around Saudi Arabia

RIYADH: Custodian of the Two Holy Mosques King Salman briefed the Cabinet, on Monday, about the message he sent to the Kuwaiti emir and the messages he received from the Moroccan king and the Qatari emir.The king also spoke about the outcome of his m...
RIYADH: The Eastern Mediterranean Office (EMRO) of the World Health Organization (WHO) on Monday announced that the region is considered a Zika virus-free zone.Dr. Alaa Alwan, the regional director of EMRO, said that it does not mean that Middle East...
JEDDAH: The Saudi Health Council is working to establish an electronic system to prevent manipulation of sick leave holidays.Dr. Yaqoob Al-Mazrouh, secretary-general of the council, disclosed this during a seminar on Sunday. He did not elaborate on h...
RIYADH: Specialized Clinics Arabia (SCA) treated a total of 9,220 Syrians at the Zaatari Refugee Camp in Jordan during the month of January 2016, according to Dr. Hamid Mufalana, SCA medical director.“Many of the patients were children who were given...
JEDDAH: The Jeddah police have solved the mystery surrounding the thrashing of a man by another, the video clip of which had gone viral.It was a Herculean task for the police to search for the victim, who had not bothered to lodge any complaint. The...
JEDDAH: The Cutoms Department at Yanbu’s Prince Abdul Mohsen bin Abdul Aziz Airport recently foiled an attempt to smuggle 64,165 Captagon pills found hidden in four boxes.Saad Al-Buqami, director-general of Customs at the Airport, said: “During our c...
AL-AHSA: Plans are afoot to turn the Al-Ahsa dates festival into an international event by adopting top standards in the manufacture, packaging and marketing of the product, Adel Al-Mulhim, the general supervisor of the festival, has said.Speaking du...
RIYADH: A gang comprising two women and youth has been arrested for allegedly looting cash from pharmacies and snatching women’s handbags in malls.Col. Fawaz bin Jameel Al-Maiman, police media spokesman of the Riyadh region, said the arrests were mad...
RIYADH: Riyadh Gov. Prince Faisal bin Bandar on Sunday called for conservation of water and electricity, even as the Water and Electricity minister said Saudi Arabia will need an investment of SR500 billion for power projects over the next 10 years t...
RIYADH: More than 200,000 people accused of various crimes were investigated by the Bureau of Investigation and Public Prosecution (BIPP) in the financial year of 1435-1436 A.H.Among the 218,000 who were investigated, around 30 percent or 65,000 were...
RIYADH: Thousands of Saudis have visited the German pavilion at the Janadriyah festival since it was opened by Custodian of the Two Holy Mosques King Salman last week, in the presence of German Foreign Minister Frank-Walter Steinmeier and German Amba...
DAMMAM: The cold wave in many parts of the Kingdom over the last week caused a decline of between 30 percent and 50 percent in farm production. This decline in turn drove prices of agricultural products at wholesale markets up by 30 percent.Farmers s...
RIYADH: The Ministry of Commerce and Industry warned on Monday that heating devices should have a voltage of 220 volts with a capacity not exceeding 2,500 watts.The announcement was made when MCI inspectors seized more than 3,000 substandard heating...
ALKHOBAR: Nearly 100 leading figures in the government and private institutions have completed training programs specializing in integrity and anti-corruption provided by the Saafah Foundation for Good Example in Riyadh, Jeddah and Alkhobar.The secre...
JEDDAH: Iraqi authorities executed in Baghdad on Sunday a Saudi prisoner, Abdullah Azam Al-Qahtani, 35, on charges described by his family as fabricated.Al-Qahtani had spent almost 13 years in the Iraqi prisons.Rumors about the execution of Al-Qahtan...

Stay Connected

Facebook