WASHINGTON (AP) — The number of workers filing for unemployment benefits fell last week to the lowest level since early July, evidence that job cuts are slowing, as housing starts continued to rebound.
The Labor Department says initial claims for unemployment insurance dropped to a seasonally adjusted 545,000 from an upwardly revised 557,000 the previous week. Wall Street economists expected claims to rise by 5,000, according to Thomson Reuters.
The decline is the third in the past four weeks. The four-week average, which smooths out fluctuations, dropped 8,750 to 563,000. That's still far above the 325,000 per week typical in a healthy economy.
The number of people claiming benefits for more than a week rose by 129,000 to a seasonally adjusted 6.2 million.
In the housing report, the Commerce Department said housing construction rose in August to the highest level in nine months as a surge in apartment building offset a decline in single-family construction.
Commerce said construction of new homes and apartments rose 1.5% to an annual rate of 598,000 units last month. That is slightly lower than the 600,000-unit pace economists had forecast.
The increase pushed building activity to the highest level since last November and left home construction 24.8% above the record low set in April. The August performance was another sign that the nation's housing industry has begun to recover from its worst downturn in decades.
Applications for building permits, a good forecaster of future activity, posted a 2.7% rise in August to an annual rate of 579,000 units, slightly below the 580,000 level that had been forecast. Permits for single-family homes dipped 0.2% while multifamily units rose 15.8%.
The 1.5% rise in housing starts followed a small 0.2% dip in July. August's strength came from a 25.3% surge in construction of multifamily units, a volatile sector that fell 15.2% in July.
The larger single-family sector dipped 3% last month to an annual rate of 479,000 units, first setback following five straight monthly gains.
By region, construction shot up 23.8% in the Northeast and 0.9% in the Midwest. Activity was flat in the West and fell 2.4% in the South.
Builders slammed the brakes on construction after the housing bubble burst following five consecutive boom years. The weakness in housing spread to the financial sector as defaults on home mortgages soared. This all contributed to pushing the country into the worst recession in seven decades. Economists believe the overall downturn has ended as well.
Builders have been ramping up because buyers want to take advantage of a federal tax credit for first-time homebuyers. It covers 10% of a home price up to $8,000, and is set to expire at the end of November.
The National Association of Home Builders said Wednesday that its housing market index rose in September, reflecting growing optimism in the industry about home sales.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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