U.S. housing, jobs data bolster economic outlook

Thu Aug 21, 2014 11:09am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Lucia Mutikani

WASHINGTON (Reuters) - U.S. home resales rose to a 10-month high in July and the number of Americans filing new claims for unemployment benefits fell last week, signaling strength in the economy early in the third quarter.

The growth outlook was further buoyed by other reports on Thursday showing factory activity in the mid-Atlantic region hit its highest level since March 2011 in August while a gauge of future economic activity increased solidly last month.

The National Association of Realtors said existing home sales increased 2.4 percent to an annual rate of 5.15 million units. That was the highest reading since last September and confounded economists' expectations for a pullback.

Home resales have now increased for four straight months after the housing market recovery stalled in the second half of 2013 following a run-up in mortgage rates.

"It goes some way in allaying fears about a relapse in the housing sector recovery, which until recently appears to have stagnated," said Millan Mulraine, deputy chief economist at TD Securities in New York.

In a separate report, the Labor Department said initial claims for state unemployment benefits fell 14,000 to a seasonally adjusted 298,000 for the week ended Aug. 16. That pointed to a sustained improvement in labor market conditions.

The four-week average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 4,750 to 300,750. But at that level it is consistent with solid job growth and claims are back to pre-recession levels.

U.S. stocks were trading higher, with the S&P 500 index .SPX hitting an intraday record. The housing index was up 0.27 percent, with Pulte Group (PHM.N: Quote) gaining 0.26 percent.   Continued...

 
A home for sale sign hangs in front of a house in Oakton, on the day the National Association of Realtors issues its Pending Home Sales for February report, in Virginia March 27, 2014.  REUTERS/Larry Downing