Jobless claims fall to 7-month low; construction rebounds

11/18/2011

WASHINGTON — New U.S. claims for jobless benefits hit a seven-month low last week and permits for future home construction rebounded strongly in October, suggesting the economy was gaining traction.

The improving economic picture was spoiled somewhat by another report on Thursday showing factory activity in the Mid-Atlantic region slowed this month on weak orders. However, employers hired more workers and increased hours.

Initial claims for state unemployment benefits fell 5,000 to 388,000, the Labor Department said, pushing a four-week average below the 400,000 mark for the first time since April.

The report covered the survey period for the government's employment count for November and offered hope that hiring accelerated this month after payrolls rose 80,000 in October.

First-time claims dropped 16,000 between the October and November survey weeks. The government will release its job count on Dec. 2.

"We believe this decline could be heralding a pickup in the pace of job creation," said John Ryding, chief economist at RDQ Economics in New York.

The weak labor market, marked by a 9 percent unemployment rate, has been one of the hurdles to stronger economic growth.

Outside the jobs market, there were signs of stability in housing. Permits for home building soared 10.9 percent to a seasonally adjusted annual rate of 653,000 last month.

While new construction fell 0.3 percent to an annual rate of 628,000 units, economists believe residential building soon will contribute to growth as demand for rentals boosts the construction of apartment buildings.

Last month, permits for buildings with five units or more rose to their highest level in three years.