Official figures show that new claims for US unemployment benefits fell last week to almost the lowest level of the year, raising hopes for a recovery in the country's jobs market.
The Labor Department said 420,000 initial jobless claims were filed in the week ending December 11, down 3,000 from the previous week's revised reading of 423,000. Analysts had expected a slight rise in claims.
Last week's new claims were the second-lowest of 2010 after a mid-November drop to 410,000. The latest data confirmed a downward trend in new claims seen since this year's peak in August above 500,000.
The four-week moving average, which helps smooth volatility, highlighted the emerging stabilisation in a battered labour market where unemployment has clung near 10% amid a weak economic recovery from severe recession.
The four-week average of new claims dropped by 5,250 to 422,750, the lowest level since August 2008, the month before the Lehman Brothers bankruptcy sent global financial sectors into a tailspin and the US economy into the worst recession since the 1930s.
US housing starts rise, but future fears
Separate figures show that US housing starts rose by slightly more than expected in November, but a surprise drop in permits for future home construction indicated continued weakness in the housing market.
The Commerce Department said housing starts rose 3.9% to a seasonally adjusted annual rate of 555,000 units. October's starts were revised up to 534,000 units from the previously reported 18-month low of 519,000 units.
Despite last month's pick-up in residential construction, housing remains weak as a 9.8% unemployment rate affects demand and homeowners' ability to hang on to their properties.
A survey on Wednesday showed that sentiment among US home builders was stuck at record low levels this month, suggesting residential construction will again be a drag on the overall economy in the fourth quarter.
New building permits fell 4% to a 530,000-unit pace last month, the lowest since April 2009, after a 0.9% increase in October.
