WASHINGTON — Housing construction unexpectedly plunged, the number of people receiving jobless benefits grew and JPMorgan Chase said its first-quarter profit dropped compared with last year.
That was the bad news. But those same reports Thursday included some silver linings suggesting the recession may be easing.
The pace of new-home construction seems to be nearing a bottom.
First-time jobless-benefit claims fell more than expected for the second straight week. And JPMorgan’s profits were larger than analysts expected.
“The economy is still very weak, but there are some encouraging signs that support cautious optimism,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech Thursday.
The Commerce Department said construction of new homes and apartments fell 11 percent in March. But economists noted that the drop was driven by a steep fall in new apartment building. The construction of new single-family homes matched February’s level and remained above January’s record low.
Economists cautioned that the figures largely reflect a slowing of the pace of economic decline compared with even worse conditions earlier this year. Recovery is still at least months away, they said.
Separately, the Labor Department said its tally of initial unemployment claims dropped to a seasonally adjusted 610,000 from a revised 663,000 the previous week. That was far below analysts’ expectations of 655,000 and the lowest level since late January.
Initial unemployment claims reflect the pace of layoffs by companies and are considered a timely, if volatile, measure of the economy. While declining, they remain much higher than a year ago, when claims stood at 369,000.
Economists are watching the jobless-claims figures for signs of recovery. Goldman Sachs said in a report this week that claims “normally peak six to 10 weeks before the end of recession.” The four-week average of claims, which smooths out fluctuations, fell by 8,500 to 651,000, the department said. That’s still far short of the 30,000 to 40,000 drop that Goldman Sachs said would be needed before it would conclude that claims have peaked.
