U.S. home building projects started in December fell by 14.2 percent to the lowest pace in
more than 16 years and more sharply than economists expected while building permit activity, a sign of future construction plans, also dropped to levels not seen since early 1993, a
government report showed.
But the number of workers filing initial claims for U.S. jobless benefits fell unexpectedly by
21,000 last week, suggesting some improvement in the health of the labor market.
"The surprising drop challenges the facile assumptions that declines in the two previous weeks were due to holiday effects," David Resler, chief economist at Nomural International, said in his daily economic analysis note. "The much lower claims in the latest report also suggests the job market may not be as severely impacted by the on-going housing slump as has been assumed."
The recent trend in weekly jobless claims suggest that the job market is not pointing to a recession, even though the unemployment rate jumped sharply to 5.0 percent in December.