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Sunday 28th of March 2010
March 26, 2010    

US economy receives boost after jobless claims fall

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by Kay Murchie

The Labor Department has announced the number of US workers filing for jobless benefits fell last week.

According to the Labor Department, initial claims for state unemployment benefits fell in the week ended March 20 to 14,000 to 442,000 - boosting hopes that the recovery in the world’s largest economy is gathering momentum.

Commenting on the data, Omair Sharif, an economist at RBS in Stamford, Connecticut, said:“ This is extremely encouraging and suggests that the downtrend in the underlying pace of layoffs that was in place for most of the latter half of 2009 has resumed. That bolsters our view that labour demand is gradually improving.”

However, analysts believe that despite the buoyant figures, pressure is still on US President Barack Obama to make putting Americans back to work a top priority.

Approximately 8.4 million jobs have been lost since the onset of the recession in December 2007.

Meanwhile, payrolls are expected to grow this month as the Government increases hiring for the 2010 census.

However, while the Labor market appears to be strengthening, the housing market is suffering. Earlier this week, the Commerce Department revealed a fall in sales of new homes in the US for the month of February.

According to the Commerce Department, new single-family home sales fell by 2.2% on the month to a seasonally adjusted annual rate of 308,000 units - the lowest since records commenced in 1963.

The figures from the Commerce Department arrived just a day after the National Association of Realtors (NAR) revealed a fall in sales of previously owned homes in the US for the month of February.

The industry body said sales fell 0.6% in the month to an annual rate of 5.02 million units (an eight-month low), down from 5.05 million the previous month.

February’s fall was the third consecutive month sales had declined and have raised concern that the market may be heading for a double dip in both activity and prices.

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