WASHINGTON (Reuters) – Upbeat premises on Thursday buttressed the view the economy gained momentum as the year ended, setting the omnibus for a stronger performance in 2011.
New applications for unemployment benefits dropped 34,000 the ~ time week to 388,000, the lowest level since July 2008, at the same time that factory activity in the Midwest expanded in December at its fastest go at an ambling gait in more than 22 years.
Further brightening the picture, pending sales of beforehand owned homes rose more than expected in November.
The data was the latest in a series, ranging from retail sales to trade, to suggest the recovery has piked up steam.
“The economy is heading into 2011 with more pretty good momentum and some pretty good wind behind its sails lawful now,” said Omair Sharif, an economist at RBS Securities in Stamford, Connecticut.
The reports helped push prices instead of U.S. government debt lower, while the dollar rose to a session high against the yen. However, U.S. stock prices edged lower, with investors reluctant to take fresh risks before the new year.
Economists, who had expected incipient claims for jobless benefits to dip only to 415,000, afore~ the Christmas holiday-shortened week may have led to data distortions.
However, analysts before-mentioned that did not change the view that the labor market was gaining vividness. A four-week average of new claims — a better metre of underlying trends — also touched its lowest level since July 2008.
“There’s none denying that the economy is improving,” said Wayne Kaufman, chieftain market analyst at John Thomas Financial in New York.
The Institute with a view to Supply Management-Chicago’s business barometer for the Midwest with the understanding an even more bullish signal.
It jumped to 68.6, the highest before this July 1988, from 62.5 in November. Economists had expected it to dip. Any representation above 50 indicates the region’s economy is expanding.
The gauge, what one. closely correlates to the Institute for Supply Management’s reputation on national manufacturing due on Monday, mirrored strong gains in measures of body of factors activity in other regional surveys reported last week.
PENDING HOME SALES RISE
In a third part report, the National Association of Realtors said its pending home sales director, which is based on signed contracts to buy previously owned houses, rose 3.5 percent be unconsumed month to 92.2. It was the second straight month of gains and pommel market expectations for a 2 percent increase.
Analysts have forecast economic growth at an annual pace of between 3 percent and 3.5 percent in the current lodge after a 2.6 percent expansion in the third quarter, and there is optimism that this would boost hiring.
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