Unemployment benefit claims drop in the US

FRESH claims for unemployment benefits dropped to a near four-year low in the US last week, boosting hopes for a strong recovery in the jobs market.

Yet bullish economic news continues to elude the ailing American housing market. Housing starts fell in December as groundbreaking on rental property posted a big decline.

The Commerce Department said yesterday that housing starts fell 4.1 per cent to a seasonally adjusted annual rate of 657,000 units.

Nonetheless, some analysts are upbeat. “December’s fall reversed only half of the rise in starts in the previous month,” noted Capital Economics. “With demand set to improve this year, we think that homebuilding is past the low-water mark and will rise modestly in 2012.”

Meanwhile, the US Labour Department said initial claims for state unemployment benefits dropped 50,000 to 352,000 last week, the lowest level since April 2008 and the biggest drop since September 2005.

And a separate survey by the Federal Reserve Bank of Philadelphia showed that pace of factory activity in the US mid-Atlantic region ticked up in January, though it was not as strong as expected.