Economic reports point to gradual recovery

WASHINGTON — A report on unemployment claims and a forecast of U.S. economic activity pointed today to an economy mending slowly, without the job growth needed to fuel a vigorous recovery.

The number of newly laid-off workers filing claims for unemployment benefits unexpectedly rose last week. But the four-week average for jobless claims, which smooths out fluctuations, fell. That was an encouraging sign that the labor market is gradually improving. The four-week average is now at its lowest point since late September 2008, when the financial crisis hit with full force.

Separately, a forecast of economic activity rose for the eighth straight month in November, a private research group said, signaling the economic rebound will continue into next year.

Still, employers across the country remain reluctant to ramp up hiring.

“People who have already lost their job are having incredible difficulty finding a job,” Dan Greenhaus, an economist at Miller Tabak, said in a research note today.

A big problem is that companies lack confidence in the strength and sustainability of the recovery. FedEx Corp., for example, offered a tepid outlook today for the quarter that ends in January. The package delivery company expects the recovery to continue next year. But FedEx questioned whether demand for its services will stay strong after the peak holiday-shipping season.

Stocks fell on concerns about a still-weak job market and after FedEx’s forecast fell short of expectations. In late-morning trading, the Dow Jones industrial average was down 94 points or about 0.9 percent. Broader stock averages also fell.

The Conference Board said its index of leading economic indicators rose 0.9 percent last month, up from 0.3 percent in October. The latest reading beat the 0.7 percent rise that economists surveyed by Thomson Reuters had expected.

Improvements in financial conditions, housing permits and the labor market boosted the index last month, said Conference Board economist Ataman Ozyildirim.

The Labor Department’s report on unemployment claims said the number of new claims rose to 480,000 last week, up 7,000 from the previous week. That was a worse performance than the decline to 465,000 that economists had expected. The four-week average dipped to 467,500, the 15th straight decline.

Unemployment claims have been on a downward trend since summer. That improvement is seen as a sign that jobs cuts are slowing and hiring could pick up as soon as early next year.

Still, the rise in weekly claims of 7,000 last week, which had followed an increase of 19,000 the previous week, shows that the improvement has been halting.

Economists regard jobless claims as a gauge of the pace of layoffs. Analysts say initial claims need to fall to about 425,000 for several weeks to signal the economy is beginning to add jobs.

The government said that the number of people continuing to receive regular benefits rose by 5,000 to 5.19 million for the week ending Dec. 5. That figure does not include millions of people who have used up the regular 26 weeks of benefits typically provided by the state and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

The people receiving extended benefits jumped to 4.73 million for the week ending Nov. 28, an increase of 143,759 from the previous week. That big rise reflected the fact that a total of 17 states are now processing claims for the extension of benefits that Congress approved last month.

In the Conference Board report, a measurement of the growth rate forecast over the past six months has slowed. In the half-year through November, the index grew at a 4.7 percent pace. That’s down from the 5.9 percent pace in the half-year through September and the 5.2 percent pace through October.

Economists worry about whether economic growth in 2010 will match that of the second half of this year, with unemployment high, credit still tight and the effects of government stimulus programs ending.

The economy grew at a 2.8 percent pace in the third quarter. Many economists say gross domestic product will grow between 3 and 4 percent for the current quarter.

The Conference Board forecasts economic activity by measuring claims for unemployment aid, stock prices, consumer expectations, building permits for private homes, the money supply and other data.