Americans filed the fewest claims for jobless benefits since 2008, surprising forecasters and signaling that an improving labor market will give the world’s largest economy a boost.
Claims dropped by 13,000 in the week ended Feb. 11 to 348,000, less than the most optimistic estimate of 45 economists surveyed by Bloomberg News. Other reports on Thursday showed consumer confidence improved, housing starts climbed and manufacturing in the Philadelphia area accelerated.
Stocks rose on evidence that the US expansion is gaining strength in the face of the European crisis and a slowdown in China. The decline in claims for jobless benefits coincides with a pickup in hiring that pushed the unemployment rate down to a three-year low last month, giving consumers the confidence to increase spending.
“The economy’s wheels just keep spinning faster and faster,” New York-based Bank of Tokyo-Mitsubishi UFJ Ltd chief financial economist Chris Rupkey said.
He also said payrolls were likely to rise by more than 200,000 for a third straight month this month.
The Standard & Poor’s 500 Index advanced 1.1 percent to 1,358.05 at the close in New York. The yield on the benchmark 10-year Treasury note increased to 1.98 percent from 1.93 percent late on Wednesday.
Builders broke ground on more homes than forecast last month, helped by warmer weather and adding to signs the residential real-estate market is stabilizing, data from the Commerce Department showed on Thursday.
Housing starts rose 1.5 percent to a 699,000 annual rate from a 689,000 pace in December that was stronger than previously reported. The median estimate in a Bloomberg survey called for a rise to 675,000. Building permits, a proxy for future construction, also climbed.
Manufacturing in the Philadelphia region expanded this month at the fastest pace in four months as orders and sales picked up.
The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.2 from 7.3 last month. Economists forecast the gauge would rise to 9. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
The report follows figures from the central bank on Wednesday that showed manufacturers across the country boosted production last month, capping the biggest back-to-back increases in more than two years.
“For at least the last three weeks, we’ve felt very good about the demand,” Memphis-based International Paper Co senior vice president of consumer packaging Thomas Kadien said on a Feb. 2 conference call. “From a North American perspective, the softness is behind us, and we feel much better about the first quarter.”
An improving job market is boosting consumer confidence, adding an impetus to the household spending that makes up 70 percent of the economy.
The Bloomberg Consumer Comfort Index rose to minus-39.8 in the period ended Feb. 12, the highest in a year, from minus-41.7 the previous week. It marked just the third time since April 2008 that the gauge has climbed above minus-40, a reading consistent with recessions or their aftermath.
Claims for unemployment insurance have fallen for three straight weeks, adding to evidence the labor market is recovering from the 18-month recession that ended in June 2009. The jobless rate last month unexpectedly fell to 8.3 percent, and employers added 243,000 workers to payrolls, the most in nine months.