New applications for U.S. jobless benefits dipped in the latest week but remained at levels that were too high to put a dent in the unemployment rate.
U.S. housing starts rose more than expected and permits for future construction touched a five month high in May, a government report showed on Thursday, but any recovery will be hampered by a glut of pre-owned homes.
CLAIMS * The Labor Department said on Thursday new jobless claims fell to 414,000 in the week ended June 11 from an upwardly revised 430,000 in the prior week. * Economists polled by Reuters had been looking for a smaller decline to 420,000. Claims have been above 400,000 for two months now, reflecting a rough patch in the recovery that has led to renewed weakness in an already anemic job market.
HOUSING * The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April's steep decline. * April's starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate. * Economists polled by Reuters had forecast housing starts rising to a 540,000-unit rate. * Compared to May last year, residential construction was down 3.4 percent.
ELIZABETH MILLER, PRESIDENT, SUMMIT PLACE FINANCIAL ADVISORS, SUMMIT, NEW JERSEY:
I think this data is going to be important today. Jobless claims fell 16,000, which is a nice improvement and a little better than consensus. The improvement is not huge, but I think given the trend we've been on, this is going to get a fair amount of attention, at least to start the market off. I don't know if this is strong enough to continue for the rest of the day. Obviously the turmoil in Europe continues to overhang the market, but I think investors are looking for reasons to come back to the market, so we should get at least a nice start.
MARK VITNER, SENIOR ECONOMIST, WELL FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA:
JOBLESS CLAIMS: It's a slight positive. Jobless claims over 400,000 is still very high but it's a lower number than expected. We are looking for jobless claims to decline over the next few weeks.
The June payroll number will be better than May because the effect from the supply-chain disruption is likely over. It's going to be over 100,000, and maybe up to 150,000. But it's too soon to tell. We might know better next week.
HOUSING STARTS: We were looking for a bigger jump in multi-family starts. It's a sign we had a better weather in May. We also saw a big jump in permits with most of them in apartments. We are hearing a lot of apartment developers have projects in the works if they can get financing. There is perhaps a recovery in multi-family construction which is demand driven not due to tax incentives.
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON:
The data is going to be taking a back seat to euro zone headlines today. That said, it's nice to see jobless claims come down a bit, though this was still the 10th week above the 400,000 mark. Some better news on housing is welcome as well. But the market is worried about the protests in Greece and money markets in the euro zone.
RICH ILCZYSZYN, MARKET STRATEGIST, LIND WALDOCK, CHICAGO:
Better than expected, and the data brought S&P futures up a tick or two, but this is a minor blip compared to the Greece debacle. The contagion thing is definitely going to impact France, and that could be bigger than Greece. Once we get through the better data here we're going to have to focus on Greece again, which isn't good. The data doesn't even matter right now, though if Greece hadn't returned to the forefront this would be positive at these technical levels. Once we get resolution on the Greece front I'm confident the market will zip right back up, with this data helping.
IAN POLLICK, ECONOMIC STRATEGIST, TD SECURITIES, TORONTO:
It was a little bit better than the consensus estimate, but there was also a slight revision upward in the previous week's claims.
Given the price action you're seeing today in the market this is largely going to fly under the radar. Typically this has been a good indicator for risk-on or risk-off on a Thursday morning, but this week the market is focused on news coming out of Europe.
The broader theme we have to look at is that the pace of job destruction is slowing but the pace of job creation is also a bit tepid. Obviously this is one of the bottlenecks of the recovery.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:
The number of people filing claims for unemployment insurance for the first time fell to 414,000 for the week ending June 11, aided by corresponding seasonal factor. The reference week in this report was a week following a Federal holiday (Memorial Day was the prior Monday), and whereby habitually the level increases after a shortened workweek, the seasonal expectation provided breathing room for a gain. Unadjusted claims only rose two-thirds of the expectation (28k), thus on an adjusted basis, claims improved.
MARKET REACTION: STOCKS: U.S. stock index futures trim losses BONDS: U.S. bond prices trim gains