The economy is showing signs of modest improvement — not enough to reduce highunemployment but enough to ease fears that another recession might be near. Fewer people applied for unemployment benefits last week, though some of that was due to technical factors. And the economy grew slightly more in the April-June quarter than previously estimated. Growth is also expected to tick up in coming months. Investors drew some hope from the latest data, as well as from news that Germany‘s government approved a plan to bolster Europe‘s response to its debt crisis. TheDow Jones industrial average finished up 143 points, or 1.3 percent, after a day of volatile trading.
The economy expanded at an annual rate of 1.3 percent in the April-June quarter, up from an estimate of 1 percent a month ago, the Commerce Department said. The improvement reflected modestly higher consumer spending and a bigger boost from trade. Even so, the economy grew at an annual rate of just 0.9 percent in the first six months of the year. That’s the weakest six-month performance since the recession ended more than two years ago. Many Americans are spending less because they’re paying off debt. That trend is likely to hold back the economy in the months ahead.
The unemployment rate was stuck at 9.1 percent in August for the second straight month. Employers didn’t add any jobs in August — the weakest showing in nearly a year. Economists expect little if any improvement in hiring for September. Sweet thinks employers will have added 50,000 jobs this month. More than twice as many jobs would be needed just to keep up with population growth. Others are gloomier. Capital Economics predicts that the economy in September will have failed for a second straight month to create any jobs. The main problem, the firm says, is that businesses don’t think their customer demand justifies additional workers. For more information check out the full article here.
- Unemployment benefits applications fall but joblessness remains high (csmonitor.com)
- Economy gaining but not enough to cut unemployment (sfgate.com)
- GDP revised upward, but economy still weak (seattletimes.nwsource.com)