The latest U.S. economic data suggest the American economy will grow next year despite continued high unemployment.
The consensus view among economists is that the U.S. economy is expanding at a 3 percent annual rate in the final months of the year, marking the end of a recession that began in late 2007. If a recovery is under way, its strength and sustainability has yet to be established. But clues are emerging.
A gauge of future economic activity rose for the sixth consecutive month in September. The New York-based Conference Board's index of leading economic indicators rose 1 percent last month, following a 0.4 percent gain in August. The index, which takes into account factors ranging from manufacturing hours worked to orders for goods to interest rates, is seen as a reliable indicator of where the U.S. economy is headed.
"The six-month rise in the leading economic indicators really tells us that this recession looks to be done," said economist Joel Naroff. "A broader range of factors are beginning to show growth in the economy, and that tells me that growth is here."
But will average Americans perceive the economic improvement? Perhaps not for the millions who are looking for work. U.S. unemployment stands at 9.8 percent and is projected to surpass 10 percent in coming months even if the United States records positive economic growth. Thursday, the Labor Department reported the number of newly laid off Americans filing for unemployment benefits stood at 531,000 last week, up from 520,000 the previous week.
PNC Financial Services Group chief economist Stuart Hoffman says fewer people are seeking jobless benefits than was the case in the early months of the year, but that the overall decline is not big enough to bring down the national unemployment rate.
"The number has come down. It is well below the high reached last spring," he said. "But it does not imply that there was job growth in October, probably still a job loss. It is just a smaller loss than we have seen in previous months. When we get below 500,000 [claimants per week], then I think we might be poised to see some job growth, finally, in the first quarter of next year."
Meanwhile, well-known American corporations continue to report stronger-than-expected earnings, including telecommunications provider AT&T and fast food giant McDonald's.