Jobless applications dip; housing starts rise
Both figures still below rate considered healthy for economy
WASHINGTON – Fewer Americans applied for unemployment benefits last week and builders broke ground on more homes in May. The latest data offered some hope that the economy may be improving after hitting a slump in late spring.
Unemployment benefit applications fell to a seasonally adjusted 414,000, the Labor Department said. It was the second drop in three weeks and a positive sign that layoffs are slowing.
Still, applications have been above 400,000 for 10 straight weeks, evidence that the job market is weak compared with earlier this year.
Home construction rose last month to a seasonally adjusted annual rate of 560,000 units per year, the Commerce Department said. Economists say the pace of construction is far below the 1.2 million homes per year that must be built to sustain a healthy housing market.
The modest improvements in two of the economy’s most troubled areas were enough to give Wall Street a lift after a major sell-off the previous day. The Dow Jones industrial average gained nearly 65 points on the day.
Unemployment applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000 – an eight-month high – and they have declined slowly since then.
In other reports:
• The number of single-family homes started in May rose a modest 3.7 percent. But the construction pace of single-family homes, which accounts for about 80 percent of all residential construction, is well below the 2010 rate.
• Housing permits, a gauge of future construction, rose last month to the highest level since December. But apartment and condominium construction accounted for a large portion of that increase.
• The Federal Reserve Bank of Philadelphia said its regional index of manufacturing conditions dropped to -7.7 in June, down from 3.9 in May. It was the first negative reading since last September and the lowest reading for the index since July 2009. The index tracks manufacturing conditions in the region covered by the Philadelphia Fed. That includes eastern Pennsylvania, southern New Jersey and Delaware.