Two new reports are signaling that the sluggish U.S. economy is on the upswing.
The government said Thursday that the number of jobless workers making initial claims for unemployment assistance last week fell to the lowest point in five years. Meanwhile, U.S. builders started construction on more new homes than at any point since mid-2008.
The senior economist at one of the country’s biggest banks, James Glassman of JPMorgan Chase, said that “it’s pretty good news that the recovery is waking up.”
The U.S. Labor Department said 335,000 unemployed workers sought government aid, down 37,000 from the week before. Seasonal hiring trends may have contributed to the sharp drop, but the American labor market has been steadily, if slowly, improving.
Analysts say the drop in the number of new claims may be an indication that employers are laying off fewer workers, while not necessarily embarking on robust hiring of more workers.
The government’s Commerce Department said builders started new home construction in December at an annual pace of 954,000 houses, a jump of more than 12 percent over November.
For all of 2012, the housing industry, one of the hardest hit during the 2009 recession, started work on 780,000 new houses. That figure is still only about half of what economists consider to be a healthy market, but it was the most since 2008.
Glassman said the weekly jobless claims can be volatile, but that the housing construction expansion “is not an aberration, because builders cleaned up the glut of houses built in the last decade, rates are extremely attractive, and the job market is starting to improve for recent college grads, the 25-34-year-olds who tend to drive the net need for living space.”
He said that despite “all the complaints and anxiety about the economy” in the past year, “our two most credit-sensitive sectors, autos and housing, came roaring back. And I mean roaring.”