With most economists tipping a second half U.S. recovery as the key to Canada’s prospects, some data out Thursday offered a little more hope that the U.S. recovery is building.

The U.S. Labour Department is reporting a better job picture for last week, though economists warn the improvement is in line with the usual bump in summertime employment. Initial jobless claims fell by 29,000 to 412,000. The four-week average, which smooths out weekly fluctuations, declined by 3,500 to 424,000.

In a separate release, the U.S. Commerce Department says home-building activity increased 3.7% to 1.803 million annual rate in June. This followed an increase of 6.8% in May.

“These figures are welcome, but both should be viewed cautiously with respect to the trend,” says BMO Nesbitt Burns.

“Housing will have to weather the rise in mortgage rates, which appear to have bottomed, while the claims number is from the early July blackout period when the data are not to be trusted.”

On the housing side, new permits also gained 0.8%, suggesting that building will continue for some time. “All-in-all, housing activity remains buoyant in the U.S., the result of still very low mortgage rates stimulating demand,” says RBC Financial.

“However, any big pick-up in Treasury yields at this point would pose a series challenge to the ongoing strength of housing and as a result a risk to the overall recovery should business spending fail to pick-up the economic baton any time soon.”

“The rise in single-family building was certainly very strong and will help lift summertime GDP,” comments Nesbitt. “As well, the positive fall-out from solid housing starts is key to housing-related consumer spending.”

On the jobs data, RBC says, “Certainly, claims remain at elevated levels and still point to a contraction for the payroll numbers. However it should be noted that retooling in the auto industry may have plagued the July claims figures to some extent. Nevertheless, the hope is that the bloodletting in the job market will begin to ease.” RBC declares that a substantiated pick-up in the labour numbers will be needed in order to justify that a meaningful U.S. economic recovery is indeed underway.