 "US jobless claims at 8-week low; housing starts fall")
The number of Americans filing new applications for unemployment benefits fell last week to the lowest level in eight weeks, suggesting the labour market continued to strengthen despite the recent tightening in financial market conditions.
While other data on Thursday showed housing starts fell for a second straight month in August, they remained above the one million-unit mark, which signals a housing market growing at a solid clip. In addition, building permits rose last month. The signs of a firming economy are supportive of an interest rate hike by the Federal Reserve at a meeting that concludes on Thursday. But the case for higher borrowing costs has been undermined by global financial markets turmoil.
The decision whether to raise the Fed's short-term interest rate from near zero is seen as a close call.
Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 264,000 for the week ended September 12, the Labor Department said on Thursday. That was the best reading since the week ended July 18, when claims hit their lowest level since 1973.
It marked the 28th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labour market. Economists had forecast claims holding at 275,000 last week.
US financial markets are pricing a roughly 25 per cent probability of a lift-off in the Fed's benchmark overnight interest rate when the US central bank announces its decision at 2 pm(1800 GMT). The decision was awaited at the time of going to print.
Stocks in Wall Street were little changed as investors awaited the announcement, while prices for US Treasury debt rose marginally. The dollar fell against a basket of currencies.
The claims data covered the period during which the government surveyed employers for the non-farm payrolls portion of the September employment report. Claims fell 13,000 between the August and September survey weeks, suggesting some pick-up in job growth after slowing in August.
Labour market conditions are tightening, with record high job openings. At a 7-1/2-year low of 5.1 per cent, the unemployment rate is into the range that most Fed officials think is consistent with a low but steady rate of inflation.
In a second report, the Commerce Department said groundbreaking for new homes dropped 3.0 per cent to a seasonally adjusted annual pace of 1.13 million units last month.
Despite the fall, which reflected declines in groundbreaking on single and multifamily projects, starts remained above a one million-unit pace for the fifth straight month. Building permits increased 3.5 per cent last month to a 1.17 million-unit pace, after declining 15.5 per cent in July.
"The small dip in August housing starts is minor considering the sustained momentum we've seen in housing overall in 2015," said Bill Banfield, vice-president at Quicken loans in Detroit.
"When you couple the slow but steady rise in single-family unit construction with an increase in builder confidence, it's further support that housing is returning to its place as a major player in driving economic growth." The firming labour market has unleashed pent-up demand for housing, especially among young adults. A report on Wednesday showed confidence among homebuilders advancing to a near-decade high in September.
In August, groundbreaking for single-family homes, which accounts for the largest share of the market, fell 3.0 per cent to a 739,000 unit pace. Single-family home building in the South, where most of the home construction takes place, rose 9.2 per cent to the highest level since December 2007.
Starts for the volatile multifamily segment fell 3.0 per cent to a 387,000 unit rate. Single-family building permits rose 2.8 per cent in August to their highest level since January 2008. Multi-family building permits rose 4.7 per cent.
A third report showed manufacturing continued to struggle against the headwinds of a strong dollar and soft global demand.
The Philadelphia Fed said its business activity index fell to minus 6.0 in September from positive 8.3 in August. A reading below zero indicates contraction in the region's manufacturing.
While other data on Thursday showed housing starts fell for a second straight month in August, they remained above the one million-unit mark, which signals a housing market growing at a solid clip. In addition, building permits rose last month. The signs of a firming economy are supportive of an interest rate hike by the Federal Reserve at a meeting that concludes on Thursday. But the case for higher borrowing costs has been undermined by global financial markets turmoil.
The decision whether to raise the Fed's short-term interest rate from near zero is seen as a close call.
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"If the Fed just focused on the current economic situation there would be no doubt that they would raise rates today," said Harm Bandholz, chief US economist at UniCredit Research in New York. "But we learned over the past decades that the Fed puts more emphasis on financial developments than any other central bank."
Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 264,000 for the week ended September 12, the Labor Department said on Thursday. That was the best reading since the week ended July 18, when claims hit their lowest level since 1973.
It marked the 28th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labour market. Economists had forecast claims holding at 275,000 last week.
US financial markets are pricing a roughly 25 per cent probability of a lift-off in the Fed's benchmark overnight interest rate when the US central bank announces its decision at 2 pm(1800 GMT). The decision was awaited at the time of going to print.
Stocks in Wall Street were little changed as investors awaited the announcement, while prices for US Treasury debt rose marginally. The dollar fell against a basket of currencies.
The claims data covered the period during which the government surveyed employers for the non-farm payrolls portion of the September employment report. Claims fell 13,000 between the August and September survey weeks, suggesting some pick-up in job growth after slowing in August.
Labour market conditions are tightening, with record high job openings. At a 7-1/2-year low of 5.1 per cent, the unemployment rate is into the range that most Fed officials think is consistent with a low but steady rate of inflation.
In a second report, the Commerce Department said groundbreaking for new homes dropped 3.0 per cent to a seasonally adjusted annual pace of 1.13 million units last month.
Despite the fall, which reflected declines in groundbreaking on single and multifamily projects, starts remained above a one million-unit pace for the fifth straight month. Building permits increased 3.5 per cent last month to a 1.17 million-unit pace, after declining 15.5 per cent in July.
"The small dip in August housing starts is minor considering the sustained momentum we've seen in housing overall in 2015," said Bill Banfield, vice-president at Quicken loans in Detroit.
"When you couple the slow but steady rise in single-family unit construction with an increase in builder confidence, it's further support that housing is returning to its place as a major player in driving economic growth." The firming labour market has unleashed pent-up demand for housing, especially among young adults. A report on Wednesday showed confidence among homebuilders advancing to a near-decade high in September.
In August, groundbreaking for single-family homes, which accounts for the largest share of the market, fell 3.0 per cent to a 739,000 unit pace. Single-family home building in the South, where most of the home construction takes place, rose 9.2 per cent to the highest level since December 2007.
Starts for the volatile multifamily segment fell 3.0 per cent to a 387,000 unit rate. Single-family building permits rose 2.8 per cent in August to their highest level since January 2008. Multi-family building permits rose 4.7 per cent.
A third report showed manufacturing continued to struggle against the headwinds of a strong dollar and soft global demand.
The Philadelphia Fed said its business activity index fell to minus 6.0 in September from positive 8.3 in August. A reading below zero indicates contraction in the region's manufacturing.