Jobs, housing data hamper recovery
WASHINGTON - Worse-than-expected news on unemployment and home sales yesterday dampened optimism that a broad economic recovery might be near.
Many analysts don't expect the housing slide to show signs of stabilizing until the second half of this year. They said layoffs may be at their high point, but that the jobless rate, already at a 25-year high, will keep rising until the middle of 2010.
The Labor Department reported initial claims for unemployment compensation rose to a seasonally adjusted 640,000 last week, up from a revised 613,000 the previous week. That was slightly more than analysts' expectations of 635,000.
Meanwhile, the National Association of Realtors said sales of existing homes fell 3 percent in March to a seasonally adjusted annual rate of 4.57 million units, with February revised down to 4.71 million units. Sales had been expected to fall to an annual rate of 4.7 million units, according to Thomson Reuters.
The best reading of the new data is that late last year's alarming free fall is coming to an end, analysts said. "We are still falling, but we are no longer crashing," said Mark Zandi, chief economist at Moody's Economy.com.
On the housing front, IHS Global Insight economist Patrick Newport is still forecasting further declines in construction, sales, and prices.
He expects existing home sales will bottom out in the second half of this year, partly reflecting a significant improvement in affordability.