US regional factory activity, job market improve

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High unemployment and excess industrial capacity have led the Federal Reserve - the US central bank - to pledge to hold interest rates near zero for an extended period.

US fixed mortgage rates sank to or near record lows last week, home funding company Freddie Mac said on Thursday, adding incentive for refinancing and home purchases.

US Treasury Secretary Geithner told Congress' Joint Economic Committee he expected growth both in the fourth quarter and in 2010.

"But as we press forward towards recovery, there is still much work to do not only to ensure that many more Americans see the tangible benefits of recovery, but also to help ensure that Americans are never again forced to suffer the consequences of a preventable economic collapse," he said.

Given high unemployment, more Americans are finding it difficult to keep up with mortgage payments. Mortgage delinquency rates and the percentage of loans that entered the foreclosure process hit record highs in the third quarter, a report showed.

But the economic data on Thursday hinted the labor market was slowly moving toward stability. The employment index of the Philadelphia survey was at its best level since May 2008 as new orders scaled a more than two-year high.

The Labor Department report showed the four-week moving average for new jobless benefit claims last week fell to its lowest since November last year in the 11th straight decline.

Also encouraging, the number of workers still collecting benefits after an initial week of aid dropped to its lowest since March, although some of the decline may reflect workers exhausting their benefits. So-called continuing claims have fallen from a peak of 6.9 million in June.

New applications for unemployment benefits have dropped significantly from March's lofty levels, but remain above the 400,000 mark that analysts say would signal payrolls growth.

Analysts noted that the jobless claims data covered the survey period for the government's closely watched monthly report on employment. They said the report suggested job losses would be smaller in November than in October, when payrolls fell 190,000.

"The picture for the labor market is of a very, very slow improvement. But clearly in terms of the unemployment rate, we're likely to continue to see deterioration," said Anna Piretti, a senior economist at BNP Paribas in New York.