Is Recession Nearing Bottom?There are new signs the recession could be near bottom. The signs shown on Thursday: Factory orders were up more than expected, and the Dow Jones industrial average swept over the 8,000 mark for the first time in two months.
A report from the Commerce Department showed orders for manufactured goods rose 1.8 percent in February, reversing six straight monthly declines, easily beating estimates of another drop. Other economic indicators that were better than expected this week were construction spending and pending home sales.
On Thursday the G-20 meeting in London of world leaders pledged $1.1 trillion to global institutions including the International Monetary Fund to fight the recession. The European Central Bank also announced it is cutting a key interest rate to a low of 1.25 percent.
Despite these positive signs, the job market is still bleak. In most recessions, the labor market doesn't pick up steam until the recovery has already started. The monthly unemployment report due out today from the Labor department is expected to be dreary; new jobless claims reported yesterday were worse than expected.
Labor Department's initial claims for unemployment insurance rose to a seasonally adjusted 669,000 from the previous week's revised figure of 657,000. The total was above analysts' expectations and the highest in more than 26 years, though the work force has grown by about half since then.