Spending helps recovery ‘trudge ahead’
WASHINGTON – A flurry of good news this week – including falling jobless claims, stronger consumer spending and higher new-home sales – suggests the economic rebound, modest though it is, might just be here to stay.
While analysts caution that the recovery will be too sluggish to stop the unemployment rate from rising, the reports are at least encouraging enough to calm fears of a dreaded “double-dip” recession.
“This recovery continues to trudge ahead,” said economist Ken Mayland, president of ClearView Economics. “It is not a gallop. But it is still forward movement.”
Looked at together, the reports the government issued Wednesday signaled that the final quarter of 2009 at least got off to a decent start. And holiday sales should be slightly better than last year’s figures, which were the worst since at least 1969.
The number of newly laid-off workers filing applications for unemployment aid fell by 35,000 last week to 466,000, the Labor Department said. It marked the fewest new filings since September of last year.
Another report showed that Americans stepped up their shopping in October. Consumer spending rose 0.7 percent, after a 0.6 percent drop in September, the Commerce Department said.
It was the best showing since a 1.3 percent jump in August, when the government’s since-ended “cash for clunkers” rebate program enticed people to buy cars.
Some optimism was raised by a separate report Wednesday that sales of new homes rose last month to the highest level in more than a year. All the strength came from a big increase in sales in the South. Sales in all other regions dropped.
In addition, many buyers last month rushed in because of uncertainty over whether Congress would extend a special tax credit of up to $8,000 for people buying their first home. Earlier this month, lawmakers did extend the credit.
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