US jobless claims drop to 5-year low of 330,000

Published on NewsOK Modified: January 24, 2013 at 12:01 pm •  Published: January 24, 2013
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The once-battered housing sector is recovering, which is boosting construction and home prices. Home builders started work in 2012 on the most new homes in four years. And sales of previously occupied homes reached their highest level in five years last year. Still, home building and sales remain below the levels consistent with a healthy economy.

More home building will likely increase job growth. In December, the economy gained 30,000 construction jobs — the most in 15 months. And economists expect construction firms to add more jobs this year as the housing recovery strengthens.

Patrick Newport, an economist at IHS Global Insight, forecasts that construction companies will add 140,000 jobs this year, up from a meager 18,000 in 2012.

The number of people continuing to claim benefits is also falling. There were nearly 5.7 million people receiving unemployment aid in the week ended Jan. 5, the latest data available. That's down from almost 5.9 million in the previous week.

The overall economy grew at an annual rate of 3.1 percent in the July-September quarter. But economists believe activity slowed considerably in the October-December quarter to a rate below 2 percent or less, in part because companies cut back on restocking.

Less restocking leads to slower factory production, which weighs on economic growth.

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