In the US labour market, the number of claims for jobless benefits dropped to 388,000 claims in the week which ended on December 25. This was the lowest level in two years, and was lower than the 422,000 claims which were registered the previous week and the 415,000 claims which were forecast.

Meanwhile, a business barometer compiled by the Chicago Institute for Supply Management rose to 68.6 in December. This is the highest level since July 1988 and exceeded the most optimistic forecast of 61.

However, on a negative note, a measure of consumer confidence compiled by the Conference Board fell unexpectedly to 52.5 in December as consumers were concerned that jobs will remain limited in the year ahead. This was much lower than the 56.3 reading which various economists had expected.

In the housing sector, prices also dropped more than forecast in October. According to a measure by S and P/Chase-Shiller, prices fell 0.8% from those of the same month last year. This was the biggest year-on-year drop since December 2009, and exceeded the 0.2% drop forecast by various economists.

Economic data last week was light in both the euro area and in the UK. In the EU-16, loans to households and companies increased at a faster annual pace in November. Loans to the private sector increased by 2% in November, which is higher than the 1.5% annual increase registered in the previous month. This shows that the economic recovery in Europe is boosting demand for credit.

Meanwhile, a measure of money supply increased by 1.9% on a year-on-year basis in November, up from October’s 0.9% increase.

Finally, in the UK, house prices as measured by Nationwide rose by 0.4% during December, reversing the 0.3% decline of the previous month.

On a yearly basis, prices also increased by 0.4%, keeping the same momentum of the rate which was registered the previous month.

This article has been prepared by Bank of Valletta plc for general information purposes only.