U.S. jobless claims plunged to the lowest point in almost 8 ½ years last week, indicating that the labor market is strengthening. The number of Americans who applied for state unemployment aid fell 19,000 to 284,000 for the week through July 19, the lowest number since February 2006, reported the Labor Department.
Economists surveyed by Reuters had expected the jobless claims to increase to 308,000.
Another report showed that sales of new single-family homes in the U.S. declined in June, sending homebuilder shares plunging in stock markets. The Commerce Department announced on Thursday that sales declined 8.1 percent, the most since July 2013 to a seasonally adjusted 406,000-units pace. Sales stood at a revised 442,000 units in May rather than the earlier reported 504,000 units. The single-home sales last month fell 11.5 percent from June 2013.
“It’s really been a rental-driven housing recovery because it’s really new homebuilders that buy starter houses and sellers can then buy next higher-price houses so it hasn’t been a very solidly-based recovery and it’s really stalled out,” Gary Shilling, a New Jersey-based president of A. Gary Shilling & Co., an investment research firm, told Reuters.
New home sales contribute 7.5 percent of the overall housing market, which is expected to perform weakly compared to the other economic sectors. In June, new home sales plunged in all four regions, with the Northeast region recording a 20 percent decline in sales.
The number of new houses available for sale in the market appreciated 3.1 percent to 197,000 units, the most since October 2010.
The Federal Reserve is currently monitoring the labor market to decide whether it is time to hike interest rates. Last week, Fed Chairwoman Janet Yellen said that interest rates may be hiked sooner than expected if the labor market continues to strengthen faster than estimated by Fed officials. 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 firstname.lastname@example.org