New unemployment claims unexpectedly dropped by 14,000 last week, to a seasonally-adjusted figure of 442,000 last month. Analysts estimated that claims would number around 450,000. Most of the decline can be attributed to the seasonal adjustment. Without the adjustment claims would have dipped by 4,000.
In three of the last four weeks claims dropped. On the year unemployment claims are about level. Analysts are projecting the economy will add as many as 150,000 jobs in March. The trend suggests that net employment gains are coming soon.
The number of people claiming continuing unemployment benefits dropped to 4.6 million, but that number is somewhat misleading because it does not include people receiving extended benefits. 5.7 million people were on extended unemployment, 300,000 less than the week prior. Some form of unemployment benefits are claimed by more than 11 million people. The four-week moving average of claims fell to 453,750, the lowest level since September 2008.
While most employers have yet to add payroll, growth in the manufacturing sector is creating new jobs at companies such as Siemens AG and Caterpillar. Orders for heavy machinery, airplanes, and appliances have increased for the last three months. The economy grew at a pace of 5.9% in the fourth quarter of 2009, but economists forecast slower growth this quarter.
While unemployment and manufacturing numbers are at least mildly encouraging, the housing sector continues to be the millstone around the neck of the recovery. New home sales are down 23% over the last four months as the market continues to absorb distressed and foreclosed properties, eroding home values. Significant improvement in the real estate market is not expected until the labor market mends.
Now is still a good time to make a long term investment in housing. Mortgage rates are near their all-time low but are likely to increase sooner rather than later. The first-time home-buyer tax credit is still in effect, and housing prices are lower than they have been in years. Don’t miss out on this opportunity to get in on the ground floor of the recovery. Call us today at 877-868-2503.
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