The "green shoots" that Federal Reserve Board Chairman Ben Bernanke mentioned two months ago started to make themselves more apparent this morning, at least in data on jobless claims and durable goods. But before investors could get too optimistic, a report on U.S. home sales underlined the fact that, some promising signs aside, recovery is likely to be slow and gradual.
The Labor Department reported this morning that the number of unemployment claims fell by 13,000 last week to 623,000, seasonally adjusted. That puts the four-week average of unemployment claims, which smooths out single-week inconsistencies, at 626,750—about 30,000 below the peak in April.
While that's good news, employment numbers remain far from rosy. A year ago, weekly claims were 378,000. And the number of people on unemployment benefits has reached 6.78 million, the highest level since records began to be kept in 1967.
Meanwhile, orders for durable goods—big-ticket manufactured items like machinery—rose more in April than in any other month since December 2007. The increase of 1.9 percent was much bigger than the 0.4 percent that analysts had anticipated. Transportation equipment, including automobiles, jumped 5.4 percent. At the same time, though, the Commerce Department announced that the slump in orders in March was worse than initially reported, with orders falling 2.1 percent rather than the 0.8 percent originally thought. But new orders have moved up for two of the past three months, making analysts hopeful that when it comes to manufacturing, the recession may have reached bottom.
Tempering any optimism from the data on unemployment claims or durable goods, though, was the Commerce Department's report on home sales. Although sales rose in April, it was by just 0.3 percent. The median sales price is 14.9 percent below what it was a year ago. Meanwhile, March sales were revised from the 0.6 percent slide reported initially to a 3 percent fall. If there are "green shoots," it seems they're still slow in coming.