LITTLE ROCK — New data Thursday showed home sales sinking and claims for unemployment benefits rising.
Sales of previously owned homes fell 5.1 percent in June to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said.
New claims for unemployment insurance jumped by 37,000 last week to a seasonally adjusted 464,000, the Labor Department said. Seasonal factors boosted new requests for benefits. Still, first-time claims remain elevated, pointing to a sluggish job market.
Separately, the Conference Board, a private research group, said its gauge of future economic activity dropped in June. It was the second decline in three months.
“The overall picture is one of a very weak recovery,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “Housing still has a lot of problems, and the labor market is going to be painfully slow.”
The nation’s unemployment rate is 9.5 percent. Arkansas’ unemployment rate was 7.5 percent in June, the latest data available.
Investors looked past the latest reports to focus on earnings from a broad range of companies that showed businesses aren’t seeing a slowdown. Caterpillar Inc., 3M Co., UPS Inc. and AT&T Inc. all topped earnings forecasts and raised their outlooks for profit.
Stocks soared as analysts noted that job growth could be on the horizon if companies expect to grow.
The Dow Jones industrial average rose 201.77, or 2 percent, to 10,322.30. Broader indexes rose more than 2 percent. Interest rates surged in the Treasury securities market as investors felt less need to put their money into the safety of government securities.
First-time jobless claims jumped after falling the previous week to the lowest level since August 2008. But much of that drop was driven by temporary seasonal factors and not an improving job market.
Two weeks ago, General Motors and other manufacturers reported fewer temporary layoffs than usual this time of year, a Labor Department analyst said. Last week’s rise partly reflects the fading of that trend.
Before seasonal adjustments, claims fell by 13,113 to 498,022, the department said. The government seasonally adjusts most economic data to filter out the effect of recurring noneconomic factors.
Sal Guatieri, senior economist at BMO Capital Markets,said the report suggests that businesses will add a net total of less than 100,000 new employees in July. That’s not enough to quickly reduce the unemployment rate, he said.
“American companies ... are just not hiring to any great extent,” he said. Many are still uncertain about the durability of the recovery, he said.
The Conference Board’s Index of Leading Economic Indicators fell 0.2 percent in June, according to figures from the New York-based research group. The gauge points to the direction of the economy over the next three to six months.
The leading-indicators gauge had risen almost every month since April 2009 as the economy rebounded from recession. It was pulled higher by the increasing amount of money in the economy, the rebound in manufacturing and slow improvements in the job market.
But weakness in the housing sector, faltering consumer spending and high unemployment have raised fears about a big slowdown in growth.
“We’re looking at a very subdued recovery,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. “Companies are still very cautious to hire.”
Housing is one industry that will probably struggle, analysts said. To receive a federal tax credit of up to $8,000, homebuyers had to sign contracts by the end of April and initially close deals by June 30. Sales of existing houses are tracked when a deal closes.
The government this month extended the closing deadline to Sept. 30 after the jump in demand through April meant some purchases would not have time to be processed.
“We’re seeing the first stage of the cooling as the tax-incentive purchases fall off,” said Avery Shenfeld, chief economist at CIBC World Markets in Toronto. “We will see prices retreat as the demand falls off without the tax incentive.”
The number of homes on the market in June climbed 2.5 percent to 3.99 million. At the current sales pace, it would take 8.9 months to sell those houses, the most since August 2009.
Information for this article was contributed by Bob Willis, Shobhana Chandra, Timothy R. Homan and Courtney Schlisserman of Bloomberg News and Christopher S. Rugaber and Alan Zibel of The Associated Press.
Front Section, Pages 10 on 07/23/2010