New hopes for the economic condition of the US have arisen after fresh data revealed that jobless claims have reached a seven-month low and the permits for future home construction has drastically gone up.
This improved picture of American economy bolstered growth news. It was also aided by the finding that employers hired more workers and increased working hours. However, a report of Thursday showed that factory activity in the Mid-Atlantic region slowed this month on weak orders.
Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, said, “Economic conditions are moving upward at an accelerating pace. However, two major roadblocks stand in the way of solid growth: Rising oil prices and European debt issues.”
The Labor Department stated that the initial claims for state unemployment benefits are down to fell 388,000. For the first time since April, this is 5,000 below the average of 400,000 mark.
The report also mentioned in the the employment count for November that hiring accelerated this month after payrolls increased to 80,000 in October.
Those applying for the claim for firest time also dropped 16,000 in October and November survey weeks. The job count will be released by the government on December 2.
John Ryding, chief economist at RDQ Economics in New York said, “We believe this decline could be heralding a pickup in the pace of job creation. We do expect the report to show a pickup in employment growth along with a continued pattern of upward revisions to the prior two months.”
The 9% unemployment rate has been posing a tough hurdle to overcome for the economic growth of the US.
Besides the job scene, there is also hope glimmering from the housing section. Reaching a seasonally adjusted annual rate of 653,000 last month, the permits for home building soared to 10.9%.
While new construction fell 0.3 percent to annual rate of 628,000 units, economists believe residential building will soon 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.
Aside from these good signs, the crisis in Europe has caused bond market to go in a roller coaster ride and might affect the recovering economy again.
Talking about the European crisis, James Bullard, president of St. Louis Federal Reserve Bank, said, “If it blows up in a big disorderly way, which is what everyone is worried about, then that could come back to haunt the U.S. If it just tumbles along for a long period of time, which is the most likely outcome, then I’m not sure that you get much feedback to the U.S.”