Economic data tempers talk of a double-dip recession
WASHINGTON – The feeble economy exhibited a smidgen of strength Thursday, with mildly positive reports on jobs, store sales and housing.
Figures released on unemployment claims, store sales and home-buying contracts all trend in the right direction, tempering fears that the economy is on the brink of another downturn. Still, growth remains anemic, and a report today is forecast to show that employers have yet to step up hiring.
For now, companies aren’t resorting to widespread layoffs. New applications for unemployment benefits declined for the second straight week after rising in the previous three to above the half-million mark.
“This is something of a relief, because it suggests that the 504,000 claims number from two weeks ago was a fluke rather than an indication that the trend has suddenly surged higher,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
If claims don’t rise from their current level, that “would be consistent with … very sluggish growth rather than a double-dip recession,” he added.
Economic reports show:
• Initial claims for unemployment aid fell last week by 6,000 to a seasonally adjusted 472,000, the Labor Department said.
• The Labor Department is forecast to report today that private businesses added a net total of only 41,000 jobs last month, the fourth straight month of anemic hiring. When government jobs are included, total payrolls are forecast to drop by 100,000 – based mostly on about 115,000 temporary census jobs ending.
• The jobless rate is projected to rise to 9.6 percent from 9.5 percent, according to Thomson Reuters.
• The Labor Department said productivity, or output per hour worked, fell in the spring by the largest amount in nearly four years while labor costs rose.
• Retailers reported surprisingly strong sales in August compared to a year ago. The International Council of Shopping Centers’ index of 31 major retailers was up 3.2 percent in August, following a 2.8 percent gain in July.
• In housing, perhaps the weakest area of the economy, a report from the National Association of Realtors offered some mild optimism. The number of people who signed contracts to buy homes rose in July, though the total remained well below levels last year. Home sales are at the lowest level in more than a decade, even as mortgage rates plummet.
• Factory orders rose slightly in July after two months of declines, but most of the gains were a result of higher airplane orders. Excluding transportation, orders fell 1.5 percent, the biggest drop in 16 months.
• The nation’s gross domestic product, the broadest measure of economic output, grew at a 3.7 percent annual pace in the first quarter, but that slowed dramatically to 1.6 percent in the April-to-June period.