Figures temper recession fears

September 3, 2010 at 12:00a.m.

Associated Press

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 that the economy is on the brink of another downturn. Still, growth remains anemic, and a report today 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.

Claims for unemployment aid fell last week by 6,000 to a seasonally adjusted 472,000, the Labor Department said. When economic output is growing rapidly and employers are hiring, claims generally drop below 400,000.

The Labor Department is forecast to report today that private businesses added a net total of only 41,000 jobs last month, the fourth-straight month of anemic hiring. When government jobs are included, total payrolls are forecast to drop by 100,000 — based mostly on about 115,000 temporary census jobs’ ending.