Economic recovery slowing

Associated Press

WASHINGTON — The economic rebound is stalling.

A raft of weak new reports Thursday provided the strongest evidence yet that the recovery is slowing and added to concerns that the nation could be on its way back into recession.

Most notable was a rise in the number of people filing for unemployment benefits for the first time. The four-week average for jobless claims now stands at its highest point since March.

The bleak indicators come just after Congress adjourned for the holiday weekend without extending jobless benefits, and a day ahead of a report expected to show only modest improvement in the national job market.

On top of that, the housing market appears to be slumping again, and the Dow Jones industrials closed down for the sixth trading day in a row. Add in slower growth in China and the Europe debt crisis, and economists are scaling back their forecasts for the U.S.

“When you add it all up, it doesn’t imply a double-dip, but it does suggest that growth will be slower than we’d like to see,” said Scott Brown, chief economist at Raymond James.

A double-dip recession happens when an economy shrinks, then begins to expand again before going back into reverse. Economists don’t agree on a more precise definition.

Senate Republicans, expressing concerns about the ballooning federal deficit, this week blocked a bill that would have kept unemployment checks going to people who have been laid off for long stretches.

More than 1.3 million people have been left without federal jobless benefits after Congress adjourned without an extension. That number could grow to 3.3 million by the end of the month if lawmakers can’t resolve the impasse when they return.

Among those waiting for a resolution is Nan Esparza, 59, a single mother of three in Smithfield, N.C., who lost her job as a legal secretary early last year. Her unemployment benefits expired last month. She plans to live off savings.

“After that, I’m in a world of trouble,” she said.

Near Detroit, Todd Childress expects to run out of unemployment aid in two weeks. He lost his job as a designer at an auto parts company in March of last year and says the job openings in his field attract hundreds of applicants.

He had worked in carpet and tile installation as well, but those fields are also hurting.

“I really got no answers right now,” he said.

Less money in people’s pockets could hamper economic growth. JPMorgan Chase economist Michael Feroli lowered his growth forecast for the third quarter to an annual rate of 3 percent from 4 percent, citing tighter government spending.

Other economists expect growth to slow to an anemic 2 percent in the second half of this year. That probably wouldn’t reduce the unemployment rate, currently at 9.7 percent.