U.S. Jobless Claims Drop Last Week as Labor Market Improves

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U.S. Jobless Claims Drop Last Week as Labor Market ImprovesThe number of Americans who filed fresh claims for jobless benefits plunged more than estimated last week, signaling the sudden drop in hiring in August was probably a temporary fluke.

Fresh applications for state unemployment benefits declined by 36,000 to 280,000 in the week through Sept. 13, the weakest level since July, reported the Labor Department. Economists in a Reuters survey had expected the claims to decline to 305,000.

The report was released just a day after the U.S. central bank reiterated that it will maintain the record-low interest rates for “a considerable time”. The Federal Reserve also increased its interest-rate outlook for the end of 2015.

In another report, U.S. housing starts plunged 14.4 percent to 956,000-unit annualized pace in August. However, July’s housing starts were revised to indicate a 1.12-million unit rate, the strongest level since November 2007.

Construction permits also tumbled, though they had also increased significantly in July. Still, housing starts for single-family houses in the South, which accounts for half of U.S. single-family home construction, jumped to the highest level in eight months, with permits touching their strongest level since April 2008.

The unemployment data saw the dollar jump to the highest level in over six years against the yen.

The property sector is recovering after suddenly experiencing a downturn last year due to an increase in mortgage rates, though it is still weighed by high jobless rates and tight mortgage restrictions.

“The underlying momentum in the housing sector remains quite favorable and we expect building activity to rebound next month,” Millan Mulraine, a New York-based deputy chief economist at TD Securities, told Reuters.

The number of individuals still receiving unemployment benefits dropped 63,000 to 2.43 million in the week through Sept. 6, a low last seen in May 2007. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com