Factory activity in the U.S. Mid-Atlantic region rebounded in October and the number of Americans claiming new jobless benefits fell last week, fresh signs that the economy was likely to duck a new recession.

Optimism over the economy was, however, tempered by other data on Thursday showing a drop in sales of previously owned homes last month and only a small rise in a gauge of future growth.

Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 403,000, the Labor Department said. Economists had forecast claims falling to 400,000.

Separately, the Philadelphia Federal Reserve Bank said its business activity index rebounded to 8.7 in October, the highest reading in six months, from minus 17.5 in September.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

This is yet another number consistent with a slow-growing economy, but no recession, said Cary Leahey, a senior economist at Decision Economics in New York.

Reports ranging from retail sales to trade have suggested a pick-up in economic activity after a weak first half.

That view was also bolstered on Thursday, with the four-week moving average of jobless claims, considered a better measure of labor market trends, hitting a six-month low last week.

Michael Woolfolk, senior currency strategist at BNY Mellon in New York, said recent data on payrolls and retail sales had effectively removed the double-dip scenario for the U.S.

The weekly fall in jobless claims adds to this, and the four-week moving average continues to drift lower. But we are still a long distance from the 200,000 new jobs a month we need for a sustainable improvement in the unemployment rate, he said.

The claims data covered the survey week for the government's closely watched nonfarm payrolls count for October.

First-time applications for jobless aid fell 25,000 between the September and October survey periods, suggesting a step-up in nonfarm employment after payrolls increased 103,000 last month.

U.S. stocks were trading up slightly, while prices for Treasury debt fell. The dollar was up broadly.

An anemic economic recovery has left job growth frustratingly slow and the unemployment rate stuck above 9 percent. The claims report implied employers were not rapidly dismissing workers, despite an uncertain economic outlook.

While most parts of the economy show improvement, the housing market remains a sore spot.

Sales of existing homes dropped 3.0 percent to an annual rate of 4.91 million units, the National Association of Realtors said in another report.

Housing is still struggling and continues to be one of the biggest drags on the economy. Mortgage rates are low, but unemployment is high so I do not see where the growth can come in housing, said Jessica Hoversen, an analyst at MF Global in New York.

The Conference Board warned that the economy faced a 50 percent chance of recession despite modest gains in its leading index of activity last month.

But there is reason to be cautiously optimistic. After spiking in mid-September, jobless claims appear to have settled near the 400,000 mark that is usually associated with some improvement in the jobs market.

(Reporting by Lucia Mutikani; Additional reporting by Pedro da Costa and Jason Lange: Editing by Andrea Ricci)