Various Reports Send Mixed Signals About The Economy

As Washington seems to be stalled in their talks about raising the national debt ceiling, a couple of new reports shed a glimmer of hope on the U.S. economy.

Breaking a string of poor economic news that included the statistic that unemployment rose slightly in June from 9.1% to 9.2%, the U.S. Labor Department issued a somewhat optimistic report today.

Of course, optimism needs to be taken with a grain of salt as the news is far from earth-shattering. 

But it is promising, however.  The Labor Department reports that jobless benefit claims reached a 3-month low last week.  According to that report, initial claims for state unemployment benefits dropped 24,000 to a still high figure of 398,000.

Economist Michael Strauss, as quoted to Reuters, had this to say:

"Assuming we don’t get massive government furloughs because we don’t get the debt limit raised in the next couple of days or couple of weeks, we would probably see GDP growth in the 3 percent range in the second half of year as opposed to sub 2 percent in the first half."

Another report from the National Association of Realtors provides another reason for optimism.  Pending sales on homes jumped up 2.4% in June.

That information was tempered by the fact that although pending sales are up, contract cancellations have also increased due to lending issues.

Even so, stocks rose due to these reports. 

Although these reports show some hint of bounce back in the economy, consumer confidence continues to drop.  Bloomberg came out with their Consumer Comfort Index today and the news isn’t good. 

According to Bloomberg, the Index was minus 46.8 in a period ending July 24th.  That’s the lowest figure since May.  Only 6% of those surveyed said that they thought the economy was "in good shape."

It’s clear that we are still in the middle of a down economy, but the jobless claims and home sales data provide some hope.  Of course, everything could change in an instant depending on what happens by August 2nd regarding the debt ceiling.