Home sales rise as unemployment claims fall
Sales of previously occupied homes increased more than expected in March after three straight months of declines, the National Association of Realtors said. The housing market benefited from government incentives that drew in buyers.
Purchases jumped 6.8 percent to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December. Home prices also rose 4 percent.
Some economists expect healthy sales to continue, but caution that a clearer picture of the housing market will emerge after federal tax credits expire at the end of this month.
"The spring selling season will be a success and probably the most active we've seen in years," said Stuart Hoffman, chief economist at PNC Financial Services Group.
In a separate report Thursday, initial claims for unemployment benefits fell by 24,000 to a seasonally adjusted 456,000, the Labor Department said. That nearly matched analysts' estimates, according to Thomson Reuters.
The drop comes after claims rose sharply in the previous two weeks. A Labor Department analyst attributed those increases to seasonal adjustment difficulties around the Easter holiday, which falls on different weeks each year.
Still, many economists have been disappointed claims haven't fallen faster, which would signal more hiring. Initial claims are at about the same level they were at the beginning of the year, after rising sharply in February due to snowstorms on the East Coast.
"Claims have made a long trip to nowhere for three and half months," said Dan Greenhaus, chief economic strategist at Miller Tabak.
The four-week average of claims, which smooths volatility, increased by 2,750 to 460,250.
Claims have slowly trended down over the past year. Applications for jobless benefits peaked during the recession at 651,000 in March 2009.
Many analysts estimate that the four-week average needs to fall below 425,000 to signal sustained job growth.
A separate report from the Labor Department said wholesale prices rose a greater-than-expected 0.7 percent last month as food prices surged by the most in 26 years. But there was little sign of budding inflation in the report, which measures price changes before they reach the consumer. Excluding volatile food and energy costs, wholesale prices rose only 0.1 percent, matching analysts' expectations.
Employers in March added 162,000 jobs, the most in three years. But the pace of the economic recovery and job creation hasn't been robust enough to quickly drive down the unemployment rate. It's been stuck at 9.7 percent for three months, close to its highest levels since the 1980s.
The tally of people continuing to claim benefits, meanwhile, dropped by 40,000 to 4.65 million, the department said.
That figure lags the initial claims by one week. It doesn't include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
About 5.5 million people were receiving extended benefits in the week ended April 3, the latest data available. That's down by about 500,000 from the previous week's total.