Jobless Claims Unexpectedly Rise, Fewer Houses Started

What Thursday’s Economic Reports Tell Us

Wood beams exposed on a construction site.

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The number of people initiating claims for unemployment insurance rose for the first time in four weeks, and homebuilders broke ground on fewer houses for the first time in four months, reports showed Thursday. 

Here’s a quick look at the most significant economic indicators of the day and what they tell us.

Initial Claims for Unemployment Benefits 

  • The number of people initiating claims for unemployment insurance unexpectedly rose for the first time in four weeks, though it wasn’t far off from the typical volume seen before the pandemic began. There were 248,000 claims last week, up from 225,000 the previous week, seasonally adjusted data from the Department of Labor showed.
  • Economists who had expected a slight decline said the uptick isn’t particularly concerning, especially since it’s just one week. “Layoffs are expected to be minimal in a tight labor market where employers continue to face difficulty hiring workers,” Oxford Economics’ Mahir Rasheed wrote in a commentary. 

New Residential Construction

  • Homebuilders broke ground on 4.1% fewer houses in January than in December amid bad weather, the Census Bureau reported. It was the first decline in housing starts since September, and economists had forecast it to hold just about steady. Meanwhile, at the end of January, there were 280,000 homes authorized by a building permit (but not yet started,) the most for any month in records going back to 1999. 
  • Taken together, the numbers show homebuilders are dealing with a backlog of projects because they don’t have enough supplies or workers to finish them, economists at Brean Capital said in a commentary.

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