By Mark Felsenthal
WASHINGTON (Reuters) - U.S. housing starts fell in April and jobless claims climbed earlier this month, the government said on Thursday, showing an economy struggling to decisively turn the corner in emerging from its slump. ADVERTISEMENT
The data portrayed a housing market that has lost some of its sizzle while remaining strong, alongside a mildly worrying job market in which new openings are failing to keep pace with lost positions.
"These show an economy that's on the mend, but it's not mended," said Frederick Breimyer, chief economist for State Street Corp.
Chicago Federal Reserve President Michael Moskow said, also on Thursday, that uncertainty hovers over the early shape of the U.S. economic recovery, although prospects for moderate growth are good.
"While certain sectors of the economy are still experiencing hard times, overall activity has recovered from the recession we suffered last year and we appear to be on our way to a moderate expansion," said Moskow who, under the Fed's rotation system, is not a voting member of the central bank's policy-setting committee this year.
U.S. housing starts fell 5.4 percent in April, the Commerce Department said in a report, as the housing sector weakened more than expected from a record pace that analysts said had been exaggerated by the mild winter.
Ground breaking for new homes slipped to a seasonally adjusted annual rate of 1.555 million units from a downwardly revised 1.644 million rate in March.
Analysts were expecting a smaller drop. A Reuters poll of economists had forecast new home starts would decline, but only to a 1.631 million unit rate.
The data breakdown showed starts on apartment buildings fell 11.5 percent while ground breaking for single-family homes, the largest home-building category, fell 2.0 percent.
"Housing is unlikely to be an engine of growth in the second quarter," said David Seiders, chief economist for the National Association of Home Builders.
However, April building permits, an indication of future activity, rose by 0.3 percent to a seasonally adjusted annual pace of 1.634 million units, slightly exceeding the expectations of analysts.
The Chicago Fed's Moskow said U.S. housing activity was unlikely to slow significantly nationwide in coming months, although he added that some regions and metropolitan areas may have seen some "overbuilding".
Meanwhile, the number of new jobless claims rose in the latest week, staying above 400,000 for two months, the Labor Department said. Its report also showed the number of people receiving extended benefits was at its highest in more than 19 years.
First-time claims for state unemployment benefits rose 2,000 to 418,000 in the May 11 week, the Labor Department said. Analysts had expected claims to decline, to 402,000 from the 411,000 originally reported for the May 4 week.
Economists view jobless claims above 400,000 as a sign of a lackluster labor market. They also say, however, that new hiring typically lags behind other signs of increased economic activity during a recovery.
In spite of some recent positive signs for the economy, such as an increase in industrial production, analysts said the jobs market is weak pending further evidence of an economic turnaround.
"Business continues to be very, very cautious about hiring. There still seems to be a lack of confidence in business that this is a full-fledged expansion," said Robert Dederick, a consultant for Northern Trust Co.
But a longer-term gauge of labor market prospects -- the four-week moving average that smoothes out seasonal fluctuations -- showed a third straight week of modest improvement.
Stocks rose slightly on Thursday. By midday the Dow Jones industrial average was up 19 points, or 0.19 percent, at just over 10,262. U.S. Treasury bonds climbed as the weak economic reports triggered bargain-hunting in government securities.
The data: http://biz.yahoo.com/c/e.html
A woman I work with just got a rent reduction from Post Apartments. Post is THE place to live if you wanna make believe you got some financial stability and a friend of her's who works for Post said that this was the first time in their history that corporate allowed them to offer anything but an increase. In fact, before I showed her an article about the collapse of the rental market in Atlanta, they were offering to not raise her rent if she would sign a longer term lease at current rent. Assholes.