Recession May be Coming to a Close, But Rough Waters Ahead

The U.S. economy is throwing off mixed signals to those who watch it and analyze it. While the number of those seeking jobless aid for the first time fell last week, overall unemployment numbers are on the rise. The unemployment rate rose to 8.9% in April, and economists expect that the rate will climb to nearly 10% by the end of the year. The total number of people receiving unemployment benefits rose to 6.78 million this month as well, the largest total ever and the 17th consecutive week that the number has hit an all-time high.

On the positive side, however, sales of newly built homes neither rose nor fell last month, and economists point to other signs that the real estate market is just now showing signs of coming back to life. While mortgage rates rose fairly dramatically this week, this is generally considered a sign of economic recovery, as inflationary fears make lending tighter and pushes up interest rates. There are expectations that the Fed will take measure to stimulate lower mortgage rates, thus further spurring any real estate rebound that is to occur.

The Commerce Department will issue its revised estimate of the economy’s performance later today, with many economists expecting the new numbers to show a 5.5% annual rate of decline in the gross domestic product (GDP) for the first quarter of 2009. The initial estimates forecast a 6.1% decline, meaning that the news is bad, but could have been much worse. A survey of economists indicated that 90% expect the economy to begin growing again by the end of the year.