Sunday 24th of January 2021

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Numbers Of Housing Starts And Jobless Claims Improve

The U.S. economy improved on two key fronts as residential construction last month reached its highest level since last fall and the total of newly laid-off workers seeking jobless benefits dropped last week to its lowest point in about two months.

The U.S. Commerce Department reported the building of new homes and apartments increased 1.5% to an annual rate of 598,000 units in August, the best level since November and 24.8% better than the all-time low in April. This performance was another indicator the country’s housing industry has begun its revival from its worst performance in decades.

The Northeast had the best construction performance in the nation with a 23.8% increase while the Midwest rose 0.9%. However, action was down 2.4% in the South and unchanged in the West.

The August activity was led by a 25.3% jump in multifamily housing construction starts, which was quite a recovery from a 15.2% drop the previous month. The bigger single-family sector fell 3% last month to an annual rate of 479,000 units, the first reversal after five months of increases in a row.

The future for housing also looks hopeful. Building permit applications rose 2.7% last month to an annual rate of 579,000 units, just under the predicted 580,000 level. Permits for multifamily units were up 15.8% while those for single-family units were down 0.2%.

The National Association of Home Builders reported Wednesday its housing market index has increased this month, indicating the industry is more hopeful that home sales will climb. The group’s index is up one point to 19, the best level since April 2008.

Builders curtailed construction after the housing market collapsed and ended five years of soaring activity. Added to that was a major increase in home mortgage defaults, plunging the nation into its worst recession in seven decades.

In the employment sector, the number of workers who were laid off most recently and applied for jobless benefits decreased last week to the lowest level since early July – a sign that job reductions are subsiding. The Labor Department reported unemployment insurance applications fell to a seasonally adjusted 545,000 after rising the week earlier. Economists predicted claims instead would climb by 5,000.

The drop was the third in the past month. The four-week average fell 8,750 to 563,000. However, a robust economy has a typical level of 325,000 per week.

People who seek unemployment benefits for more than one week climbed by 129,000 to a seasonally adjusted 6.2 million. (Data on continuing claims is a week behind new claims.) Add to that the federal extended benefits and the total rises to 9.01 million people who collected jobless insurance in the seven-day period that ended August 29. That total is a decrease from 9.16 million the previous week. Up to 53 weeks of federally extended benefits are available in addition to the 26 weeks allowed by the states.