WASHINGTON - The feeble economy exhibited a smidgen of strength Thursday, with mildly positive reports on jobs, store sales and housing.
Figures released on unemployment claims, store sales and home-buying contracts all trend in the right direction, tempering fears the economy is on the brink of another downturn. Still, growth remains anemic, and a report Friday is forecast to show that employers have yet to step up hiring.
For now, companies aren't resorting to widespread layoffs. New applications for unemployment benefits declined for the second straight week after rising in the previous three to above the half-million mark.
"This is something of a relief, because it suggests that the 504,000 claims number from two weeks ago was a fluke rather than an indication that the trend has suddenly surged higher," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
If claims don't rise from their current level, that "would be consistent with ... very sluggish growth rather than a double-dip recession," he added.
Claims for unemployment aid fell last week by 6,000 to a seasonally adjusted 472,000, the Labor Department said. There would be far fewer claims in a healthy economy. When economic output is growing rapidly and employers are hiring, claims generally drop below 400,000.
One positive sign for future hiring: The Labor Department said productivity, or output per hour worked, fell in the spring by the largest amount in nearly four years while labor costs rose. That follows rapid increases in efficiency during the recession and indicates companies may not be able to squeeze more work out of their reduced work forces.
Retailers, meanwhile, reported surprisingly strong sales in August compared with a year ago. They were helped by aggressive discounting, even as unusually hot weather and job worries kept a lid on back-to-school buying.
