WASHINGTON — The healthier job market that has lifted the economy in recent months shows no signs of slowing.
Applications for unemployment aid are near a four-year low, raising expectations of further hiring gains. The news Thursday helped catapult the Dow Jones industrial average to its highest close since May 2008.
More jobs and tame inflation are giving consumers more buying power. Their higher spending could further boost growth and lower the unemployment rate for February for a sixth straight month.
Even the troubled housing market is benefiting. Builders expect improved sales in the near future. In response, they’re planning to break ground on more homes.
“The housing starts and unemployment claims numbers add to the belief that the economy is shifting gears,” said Joel Naroff, president of Naroff Economic Advisers. “The decline in the unemployment rate is real, and it should continue.”
Several positive economic reports Thursday reinforced that message:
• Weekly applications for unemployment benefits fell to a seasonally adjusted 348,000, the Labor Department said. That’s the lowest level since March 2008. Unemployment applications have dropped 11 percent in four months.
• Builders broke ground in January on a seasonally adjusted annual rate of 699,000 homes, the Commerce Department said. That nearly matches November’s three-year high.
• Wholesale prices were largely unchanged in January, Commerce said. While gas prices are rising, they have been offset by falling costs for electricity, home heating oil and natural gas.
Rick Judson, a homebuilder in Charlotte, N.C., said the improved job market has made him more hopeful about 2012.
“People are more willing to get out of their cubbyholes and think about buying a home,” said Judson, 61, who has owned his homebuilding company for nearly three decades. “When we see the job market stabilize, I think we’re going to see a surge in homebuying.”
The Economy Unemployment-benefits applications drop again
