--Pending home sales jump 10.4%; best gain since November 2010
--Survey shows private businesses added 206,000 jobs in November
--Third-quarter productivity revised down to 2.3% gain
WASHINGTON -- The number of U.S. consumers signing contracts to purchase homes surged in October to the highest level this year, while a survey of business hiring grew far more than expected, in two unexpected positive signs for the overall economy.
The National Association of Realtors' seasonally adjusted index for pending sales of existing homes increased 10.4% on a monthly basis to 93.3, the highest reading since November 2010, the industry group said Wednesday.
The results were 9.2% above October 2010 and were better than expected. Economists surveyed by Dow Jones Newswires had expected pending home sales would climb by 2.0%.
"Something seems to be stirring in the housing market, though we would certainly hesitate before calling a definitive start of a recovery," said Ian Shepherdson, chief U.S. economist at High Frequency Economics
The Realtors' index tracks agreements to purchase homes. A sale is considered pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.
Pending sales rose in three out of four U.S. regions. The biggest increase, of 24.1%, was in the Midwest. They rose 17.7% in the Northeast and 8.6% in the South and fell 0.3% in the West.
"We hope this indicates more buyers are taking advantage of the excellent affordability conditions," said Lawrence Yun, the trade group's chief economist.
The housing market, however, remains shaky. Prices declined by 0.6%in September from a month earlier, according to the widely followed Standard & Poor's/Case-Shiller index of 20 major metropolitan areas. For the third quarter, prices were down 3.9% nationwide, compared with a year earlier, according to Case-Shiller.
Though sales picked up at the end of the summer, analysts said buyers were only closing deals they perceive as a bargain, which could help explain why prices are sliding again.
Meanwhile, nonfarm business productivity grew 2.3% in July through September, revised down from the previously estimated gain of 3.1%, the Labor Department said Wednesday.
The revision reflects that third quarter economic growth was not as robust as initially viewed and that the number of hours worked increased slightly. Economists surveyed by Dow Jones expected a 2.5% gain in the third quarter.
"Productivity has been rapidly decelerating recently after a sharp acceleration from early 2009 through early 2010," said Steven A. Wood, chief economist at Insight Economics LLC. He said employers are more closely aligning hiring with output growth.
Unit labor costs declined at a 2.5% annual rate in the third quarter, the new data showed. Second-quarter costs were down 0.1%, after a significant downward revision.
With high unemployment, which is expected to remain at 9.0% for November when reported Friday, workers are in a weak position to demand higher salaries, allowing companies to keep labor cost in check.
As labor cost decline it makes it cheaper for employers to add to their payrolls.
Private-business hiring jumped in November, growing by 206,000 jobs, according to an employment report published by Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.
The result far outpaced economists' forecast for an increase of 130,000. The October figures were revised to show a rise of 130,000 versus 110,000 reported earlier.
The November increase was the largest monthly gain since December 2010 and nearly twice the average monthly gain since May, when employment decelerated sharply, the report said.
In another positive sign, the U.S economy expanded at a faster pace in November as orders and production picked up, according to a survey of Chicago-area purchasing managers.
The Chicago Business Barometer rose 4.2 points, to a seven-month high of 62.6 in November, the Institute for Supply Management-Chicago reported Wednesday, well ahead of the 59.0 consensus among analysts surveyed by Dow Jones Newswires. Above-50 barometer readings indicate the economy is growing.
-By Eric Morath, Dow Jones Newswires; 202-862-9279; email@example.com
--Kathleen Madigan, Doug Cameron, Luca Di Leo and Jeff Bater, contributed to this article.