New applications for unemployment benefits declined for a
second straight week after rising in the previous three.
Retailers reported surprisingly strong sales in August.
And more people signed contracts to buy homes.
Economists were mildly encouraged by the news, which
followed several downbeat reports on housing and weaker economic growth last
week. But few saw signs that the economy is gaining momentum.
"It's encouraging that we're not seeing further
deterioration as we have in recent months," said Julia Coronado, US
economist at BNP Paribas. "But we're not turning around and moving in the
direction of stronger growth." New claims for unemployment aid fell last
week by 6,000 to a seasonally adjusted 472,000, the Labor Department said
Thursday. The four-week average of claims, a less-volatile measure, fell by
2,500 to 485,500, its first decrease after four straight increases.
Even with the declines, claims are still at much higher
levels than they would be in a healthy economy. When economic output is growing
rapidly and employers are hiring, claims generally drop below 400,000.
It appears "that a wave of panicked layoffs has
passed, as companies have become a bit calmer in the face of the financial and
economic disruptions of late spring and early summer," Pierre Ellis, an
economist at Decision Economics, wrote in a note to clients.
In a separate report, the Labor Department said
productivity fell in the spring by the largest amount in nearly four years
while labor costs rose. That indicates companies may have reached the limits of
their ability to squeeze more work out of their reduced work forces.
The nation's retailers reported surprisingly solid gains
for August. Aggressive discounting helped during an unusually hot summer when
consumers worried about jobs and a weakening economy.
And the number of buyers who signed contracts to purchase
previously occupied homes increased in July, according to the National
Association of Realtors. But it remained well below last year's levels, a sign
that demand for housing remains weak.
The modest increase in home sales comes as mortgage rates
keep falling. The average 30-year mortgage dropped to 4.32 percent this week,
down from 4.36 percent last week, according to mortgage buyer Freddie Mac.
That's the tenth time in the past 11 weeks that rates have hit their lowest
level since Freddie Mac began tracking them in 1971.
In another report, factory orders rose slightly in July
after two months of declines. But most of the gains were a result of higher
airplane orders. Excluding transportation, orders fell 1.5 percent, the biggest
drop in 16 months.
Still, concerns that manufacturing could be faltering
were eased on Wednesday with a private trade group's report showed the
industrial sector grew for the 13th straight month in August.
Requests for jobless benefits haven't improved much this
year. New claims stood at 470,000 during the week of Jan. 9, almost the same as
last week's figure. The four-week average was about 20,000 lower in January.
Economists closely watch initial claims for real-time
information on the job market. They are considered a gauge of the pace of
layoffs and a measure of companies' willingness to hire.
Hiring has slowed to a crawl in recent months. The claims
report comes one day before the Labor Department is scheduled to issue the
August employment report. That is expected to show that private businesses
added a net total of only 41,000 jobs last month, the fourth straight month of
anemic hiring.
When government jobs are included, total payrolls are
forecast to drop by 100,000 - based on about 115,000 temporary census jobs
ending. The jobless rate is projected to rise to 9.6 percent from 9.5 percent,
according to Thomson Reuters.
The number of people continuing to claim benefits fell by
23,000 to 4.46 million, the lowest since late June.
