US Jobless Claims Drop, Housing Starts Rise

Posted June 16th, 2011 at 12:40 pm (UTC-5)
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Americans put in fewer new claims for unemployment benefits last week while the number of new home construction projects last month rose.

The U.S. Labor Department said Thursday first-time jobless claims dropped to 414,000 for the week ending June 11, a decrease of 16,000 from the week before.

The number of unemployed Americans continuing to get unemployment benefits also fell, hitting its lowest level in nearly two months.

A separate Commerce Department report found the number of new homes being built jumped 3.5 percent in May from the month before. The number of permits for new building projects also gained, rising almost nine percent to its highest level since December.

Some economists and investors say Thursday's data shows the U.S. economy may be starting to strengthen again following several weeks of poor economic data.

Earlier this month, the Labor Department announced the country's unemployment rate had risen slightly, to 9.1 percent, after the economy created fewer jobs than previously forecast.

Still, another report released Thursday indicates the U.S. economy may continue to struggle, dragged down by ongoing problems with the housing sector.

RealtyTrac — a private company that analyzes the housing market — said Thursday the number of homes seized by banks fell 4 percent from April to May. But RealtyTrac said the drop was due to a backlog of homes scheduled to be repossessed.

RealtyTrac Senior Vice President Rick Sharga said there are about four million homeowners who are unable to make timely payments on their home loans.

The company said about one out of every 600 U.S. homeowners was warned in May that they were in danger of losing their homes.

Separately, a report by one of the U.S. Federal Reserve's regional banks gave another indication the country's manufacturing sector is struggling.

The central bank's Philadelphia branch said Thursday its manufacturing index fell to minus 7.7 in June. That's the index's lowest reading in almost two years, and down from a positive 3.9 in May.

Any reading below zero indicates the sector is contracting.

The index gives only a partial picture of the sector because it is based on data from only parts of the eastern United States .