Labor Market Data Upbeat, but Housing Starts Fall Sharply

Nati Harnik/AP WASHINGTON -- The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market recovery was gaining traction. The economy's brightening outlook was dimmed somewhat by another report Thursday showing a tumble in housing starts and building permits last month. "This part of economy is going in the wrong direction while the rest of the economy is picking up," said Anthony Karydakis, chief economic strategist at Miller Tabak in New York. Initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 302,000 for the week ended July 12, the Labor Department said. Economists had forecast first-time applications for jobless aid rising to 310,000. The four-weak average of claims, considered a better gauge of labor market trends as it irons out week-to-week volatility, hit its lowest level in seven years. Prices for U.S. Treasury debt extended gains after the data, while U.S. stock index futures held losses. The claims data covered the survey week for July nonfarm payrolls. Claims fell 12,000 between the June and July survey period, suggesting another month of solid job gains after June's hefty 288,000 increase. Employment has grown by more than 200,000 jobs in each of the last five months, a stretch not seen since the late 1990s.