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Washington
11 June 2009
U.S. markets posted early gains after modestly encouraging signs concerning employment and retail sales.
The U.S. Labor Department says 24,000 fewer Americans filed initial jobless claims last week than the previous week. The number of newly-idled workers, 601,000, was below most analysts' expectations. The four-week average of initial unemployment claims is also down from a month ago, although well above the levels seen in May and June of last year.
The number of Americans claiming unemployment benefits now exceeds 6.8 million, the highest number ever recorded.
PNC Financial Services Group chief-economist Stuart Hoffman says the U.S. labor market continues to deteriorate, but at a slower pace than a few months ago:
"I do not think it means we are going to see job growth in June or July," said Stuart Hoffman. "I think it means the rate of decline in the economy, which during late last year and the first quarter of this year was like a free-fall, is definitely slowing down.
Meanwhile, U.S. retail sales rose 0.5 percent in May, fueled by increasing traffic at auto dealerships and gasoline stations. It was the first retail sales boost in the last three months. The Commerce Department also reports businesses continued to cut inventories for an eighth consecutive month to match soft demand for products.
No one is predicting an immediate end to America's protracted recession, which began in late 2007. But PNC's Stuart Hoffman thinks a turnaround could occur by the end of 2009.
"We are looking at the end of this recession, probably, by the fourth quarter of this year," he said. "So, to me, these [positive indicators] are the signs that say the end [of the downturn] is near."
Last week, Federal Reserve Chairman Ben Bernanke told reporters an eventual economic recovery will be slow to build momentum, with the likelihood that job losses will linger after the economy begins to grow.
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