New U. S. claims for jobless benefits rose last week but the underlying trend pointed to an improving labor market, while regional factory data showed the economy gaining momentum as the year ended. The growth picture was brightened by other data on Thursday showing pending sales of previously owned homes jumped to a 1-1/2 year high in November, adding to signs of a tentative recovery in the housing market. Indications the economy was wrapping up the year on a much firmer footing than had been previously anticipated leaves it better positioned to deal with headwinds from the festering debt crisis in Europe and fiscal tightening at home.

"The data have maintained their stronger tone and that suggests the economy is on an upswing towards the end of 2011, but they are not pointing to robust growth in 2012," said Conrad DeQuadros, senior economist at RDQ Economics in New York. Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 381,000, the Labor Department said, above economists' expectations for 375,000. But the four-week moving average, a better measure of labor market trends, dropped to a 3-1/2 year low.