Retailers Post Strong SalesBy Reuters | Print
A rebound in previously-owned home sales, a drop in new claims for unemployment and strong retail sales last month helped quell fears this week that the economy might dip again into recession.
Investor sentiment was also lifted by better-than-expected August data reported by retailers which showed sales getting a lift as consumers sought bargains during the key back-to-school selling season.
While new jobless claims declined last week, they are still high for this stage in the recovery. Two weeks ago they hit a nine-month high and they remain above where they stood at the beginning of the year.
"We're still uncomfortably high given where we are at this juncture of the recovery, but that we're moving toward 400,000 rather than 500,000 is indicative of at least some measure of job creation," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The government is expected to report on Friday that nonfarm payrolls dropped 100,000 in August, the third straight month of job declines, with private sector employment increasing only 41,000, according to a Reuters survey.
The claims data offered few hints of whether those forecasts are on track, since it fell outside the survey period for the closely watched monthly jobs report.
The weak labor market threatens to derail the U.S. economy's recovery from the most painful recession since the Great Depression. Growth is losing steam as the boost from a $814 billion government stimulus package and the rebuilding of inventories by businesses fade.