Rising layoffs, falling home sales and slowing manufacturing activity are sparking fears that the economic recovery is headed for a springtime stall for the third year in a row.The New York Times also reports, "Rising Fears That Recovery May Once More Be Faltering" (via Memeorandum).
New data Thursday provided fresh evidence that the job market is losing the momentum it built earlier this year, which could pressure fragile housing markets that have been showing signs of life. Separate reports this week suggested that the factory sector, a source of strength in the recovery, now is being hurt by weak growth overseas.
However, recent signals have been mixed, with worrisome indicators following positive ones—such as consumer confidence and auto sales—that suggest the recovery remains on track. Economists generally believe total economic output in the first three months of the year grew at a rate a bit above 2%—slower than at the end of 2011 but significantly stronger than the same period a year ago.
"It's been the weakest recovery in the post-World War II period, and that hasn't changed," said David Rosenberg, chief economist for investment firm Gluskin Sheff.
New claims for unemployment benefits ticked down last week to 386,000 from 388,000 the week before, the Labor Department said Thursday. But those figures have been repeatedly raised in recent weeks, suggesting that the final number could be higher—and well above the 361,000 notched in mid-February. The less-volatile four-week average rose for the fifth time in seven weeks, a sign that layoffs are increasing again after approaching a four-year low earlier this year.
Economists cautioned that a range of factors, from a historically warm winter to an early Easter, have muddied the weekly figures and made it difficult to identify clear trends.
Nonetheless, the recent figures, combined with an unexpectedly weak March jobs report, suggest the job market is cooling. "It adds to concern about backsliding in job creation after faster employment gains earlier in the year," Credit Suisse economist Jonathan Basile wrote in a note to clients.
Recall that Obama's most vulnerable on the economy, so watch for more left-wing political diversions in the weeks ahead.
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