WASHINGTON - Buoyed by a string of hopeful government reports on layoffs, factory production, and consumer spending, economists are predicting that hiring and even housing will pick up in 2011 and make it a better year after all.

The reports issued this week, along with a tax-cut plan that Congress is set to pass, point to stronger overall growth next year, experts said.

Growth "has improved as the year is coming to an end," said Mark Zandi, chief economist at Moody's Analytics in West Chester. "I'm feeling more optimistic that the economic recovery will evolve into a self-sustaining expansion in 2011."

Zandi expects the economy - the nation's gross domestic product - to grow at an annual rate of 3.5 percent in the October-December quarter. That's up from previous estimates of about 2.5 percent. For 2011, he and other economists now expect growth at roughly a 4 percent pace compared with earlier forecasts of about 2.7 percent.

With 4 percent growth, the economy would at least be moving closer to the pace of expansion needed to bring down unemployment. Growth of 5 percent is needed for a full year to lower the jobless rate by one percentage point.

"There is a sense that we turned a corner - that the economy may be out of the woods," said Mark Vitner, economist at Wells Fargo.

There is reason for more optimism.

On Thursday, the Labor Department reported that 3,000 fewer people applied for first-time unemployment benefits last week. That brought the seasonally adjusted weekly total to 420,000.

The four-week average of claims, a less-volatile measure, fell for the sixth straight week to 422,750. That's the lowest since August 2008, just before the financial crisis intensified with the collapse of Lehman Bros. Holdings.

When weekly first-time applications for benefits fall below 425,000, the decline tends to signal modest job growth. But economists say applications would need to dip consistently to 375,000 or below to indicate a significant decline in unemployment. Initial applications for benefits peaked during the recession at 651,000 in March 2009.

Meanwhile, Americans are buying more imported goods. The widest measure of the trade deficit rose 3.3 percent in the July-September quarter, the Commerce Department said Thursday. Consumer demand for clothing, footwear, and household appliances boosted imports.

That was the fifth straight quarterly increase, a sign that Americans are confident enough in the economy to spend more.

And FedEx Corp., the world's second-largest package-delivery company, raised its earnings prediction for the full year on a better economic forecast and a brightened view for the holidays.

Thursday's reports follow encouraging data this week on retail sales and factory output. Both showed gains in November for the fifth straight month.