FACTORY activity in the United States 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 yesterday 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 jobless benefits slipped 6,000 to a seasonally adjusted 403,000, the US Labor Department said yesterday. 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 yesterday, 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 US."

"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.

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 improved, the housing market is a sore spot.

Sales of existing homes shed 3 percent to an annual rate of 4.91 million units, the National Association of Realtors said in another report.

Source:shanghaidaily