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US Economy Recovering, but Slowly

A woman pulls a hood over her head as she walks out of a Starbucks store into the cold wind at Times Square in New York, March 25, 2013.
Economic studies published Tuesday show a mixed picture of the U.S. economy - the world's largest - which is slowly recovering from the worst recession in decades.

Orders to factories increased strongly in February. The Commerce Department says orders to factories for long-lasting goods surged 5.7 percent for the month.

In addition, private research group Case-Shiller reports home prices in the 20 largest cities rose more than eight percent in the 12 months ending in January. Severe problems in the housing market were a key factor in the financial crisis.

In contrast to these reports, a measure of consumer confidence dropped sharply in March. Consumers told researchers at the Conference Board that political bickering over government finances made them worry about the economy. Economists watch consumer confidence closely because consumer demand drives about 70 percent of U.S. economic activity.

Economists get a look at future economic growth by tracking the sale of chemicals and the state of the chemical industry. Kevin Swift of the American Chemistry Council developed the index, and said it points to modest growth over the next six to nine months.

"Generally expanding activity, into the third quarter, almost into the fourth quarter, signaling growth that would probably be about 2.5 to 3 percent in terms of industrial production," he said.

Swift says chemicals are used early in nearly every industrial process, which gives experts several months notice of changes in the direction of economic growth. If manufacturers want more materials, they may have orders for more products. If chemical sales fall, then the economy is probably slowing down.