Jobless claims reported at lowest in 5 years

— The number of Americans seeking unemployment aid fell last week to the lowest level in five years, but the decline may reflect the government’s difficulty adjusting its numbers to account for layoffs after Christmas, experts say.

The Labor Department said Thursday that weekly unemployment benefit applications dropped 5,000 to a seasonally adjusted 330,000. That’s the fewest since January 2008.

The four-week average, a less-volatile measure, fell to 351,750. That’s also the lowest in nearly five years.

Layoffs normally rise in the second week of January because of seasonal jobs, and then they level off. The department seeks to adjust for those trends, but the figures can still be volatile.

“The swings are attributable to the calendar,” said Brian Jones, senior U.S. economist at Societe Generale in New York. He said the numbers probably will rise at the end of the month. “We’re going to pay for this,” he said.

If the trend holds up, fewer applications would suggest that the job market is improving.

“Encouraging news on the U.S. jobs front, even when you remove all of the noise,” said Jennifer Lee, an economist at BMO Capital Markets. “Weekly data are noisy, particularly atthis time of year, so keep that in mind.”

Applications are a proxy for layoffs. They fluctuated between 360,000 and 390,000 for most of the past year. At the same time, employers added an average of 153,000 jobs a month. That’s been enough to slowly push down the unemployment rate, which fell 0.7 percentage point last year to 7.8 percent.

There have been other positive signs for the economy and job market.

The once-battered housing sector is recovering, which has prompted an increase in construction and home prices. Home builders started work in 2012 on the most new homes in four years. And sales of previously owned homes reached their highest level in five years last year. Still, home building and sales remain below the levels consistent with a healthy economy.

More home building will likely generate jobs, experts say. In December, the economy gained 30,000 construction jobs - the most in 15 months. And economists expect construction firms to add more jobs this year as the housing recovery strengthens.

Patrick Newport, an economist at IHS Global Insight, forecasts that construction companies will add 140,000 jobs this year, up from a meager 18,000 in 2012.

The number of people continuing to claim benefits also is falling. There were nearly 5.7 million people receiving unemployment aid in the week that ended Jan. 5, the latest data available. That’s down from almost 5.9 million in the previous week.

The overall economy grew at an annual rate of 3.1 percent in the July-September quarter. But economists believe that activity slowed considerably in the October-December quarter to a rate below 2 percent or less, in part because companies cut back on restocking.

The index of U.S. leading indicators rose in December by the most in three months, signaling stronger housing and job markets that are expected to help the economy grow in the first half of 2013.

The Conference Board’s gauge of the outlook for the next three to six months increased 0.5 percent after no change in November, the New York-based group said Thursday.

Information for this article was contributed by Christopher S. Rugaber of The Associated Press and by Alex Kowalski of Bloomberg News.

Front Section, Pages 1 on 01/25/2013

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