Jobless claim drop bright spot in economy

WASHINGTON - Sales of new homes plummeted in January, and businesses ordered fewer long-lasting goods. But the number of people applying for unemployment benefits has fallen over the past four weeks to the lowest level in 2 1/2 years.

Together, the government reports Thursday sketched a mixed picture and suggested that the struggling housing industry remains a drag on an economy that's growing slowly but steadily.

New-home sales dropped 12.6 percent last month to a seasonally adjusted annual rate of 284,000, the Commerce Department said. That's less than half the pace economists consider healthy. The drop is a worrisome sign because it follows the worst year for new home sales in nearly 50 years.

On Wednesday, the National Association of Realtors reported sales of existing U.S. homes rose a seasonally adjusted 2.7 percent in January, the fifth rise in six months, as buyers snapped up cheaper homes.

Companies' orders for durable manufactured goods, excluding the volatile aircraft and auto categories, dropped 3.6 percent last month, Commerce said in a separate report. The drop followed two months of gains. One category that's viewed as a proxy for business investment spending fell by the largest amount in two years. Overall, orders for durable goods rose 2.7 percent, driven by a jump in commercial aircraft orders. Still, orders totaled around $200 billion, considered a healthy level and 25 percent above the recession low hit in March 2009.

Applications for jobless benefits dropped by 22,000 last week to a seasonally adjusted 391,000, the Labor Department said. It was the third decline in four weeks.

As economists cheered the jobless claims data they shrugged off the other reports, noting that durable goods orders are extremely volatile and arguing that harsh winter weather might have weighed on home sales.

"These three reports do not cause a downgrade in anyone's view of the economy," said Robert Dye, a senior economist at PNC Financial Services in Pittsburgh.

Combined News Services