US recovery gains impetus as key sectors lead way
THE US economic recovery is showing signs of gradually gaining traction, with figures pointing to improved health, housing, employment and manufacturing sectors.
In November, new home construction picked up for the first time in three months as the residential real estate market struggles to avert a second slump.
Labour department figures yesterday showed new claims for jobless benefits edged lower last week, and Federal Reserve Bank of Philadelphia data revealed manufacturing in that region at its highest in five years in December.
Housing starts rose by 3.9 per cent in November to an adjusted annual rate of 555,000, the commerce department said. That was a bigger jump than economists expected, but construction was still off by 5.8 per cent from the same month a year ago when the sector surged on the back of government stimulus.
The struggles facing the housing market were highlighted by a drop in building permits, which fell by 4 per cent to 530,000. Permits, which signal future construction, are down by 14.7 per cent from a year ago.
Last month, new construction was concentrated on single-family housing units, which rose 6.9 per cent. Multi-family housing construction dropped by 18.2 per cent from October to November.
Regionally, housing starts were strongest in the midwest, climbed modestly in the south and west, and slipped in the northeast.
Dwindling claims for unemployment insurance could mean that job creation is gathering steam. Initial jobless claims slipped by 3,000 to 420,000 last week. That brought the less volatile four-week average of new claims down 5,250 to 422,750. But continuing claims climbed, rising by 22,000 to 4.135 million.
“The claims data is consistent with a slow improvement in labour market trends,” said Alan Ruskin, strategist at Deutsche Bank.
Manufacturing led the US recovery earlier in the year and appears to be staging an end-of-year rebound. – Copyright The Financial Times Limited 2010