When The Conference Board announced this morning that America’s recession is “losing steam,” it added its voice to an ongoing discussion among economy watchers about whether the worst of the downturn is finally behind the country.
The New York-based Conference Board’s index of leading economic indicators rose 1.2% in May, the second consecutive month of gains. Seven of the Board’s 10 indicators improved in May. A week earlier, USA Today and the market research firm IHS Global Insight made headlines when their new Economic Outlook Index, a composite of 11 variables, forecast that the recession would end in September, “with a mild recovery beginning in October.”
The U.S. Department of Labor joined the chorus when it reported this morning that continuing jobless claims fell by 148,000 to 6.68 million during the week that ended June 6. That was the largest drop in more than seven years and broke a string of 21 weeks of increases.
Other positive signs include the fact that inflation remains under control. The federal government’s Consumer Price Index in May was down 1.2% from a year ago, and rose only 0.1% from the previous month, despite recent spikes in oil and food prices. And the Federal Reserve Bank of Philadelphia reports this morning that manufacturing firms in the Philadelphia say they are seeing the best business conditions since last September, when the economy crashed.
These so-called “green shoots” in the economy could still prove to be false alarms. "We see a bottom in the fall, but there's a lot of risk attached to that," David Wyss, chief economist for Standard & Poor’s, told USA Today. The Philadelphia Fed Bank’s economic index is still negative 2.2 for June, which means more businesses than not see business conditions worsening. But that index’s latest reading is a dramatic improvement from the negative 22.6 it registered in May, according to MarketWatch.
One indicator of how soon a metropolis might recover could be how well its housing market has fared during the recession. A new survey by the Brookings Institution’s Metropolitan Policy Program, which monitors the economies of 366 metropolitan areas, found that in the first quarter of 2009, 38 of the top 100 metro areas avoided declines in home prices over the previous 12 months, during which prices nationwide had dropped by 6%.
Brookings’ “MetroMonitor” deems San Antonio the country’s most recession-resistant town, based on four key indicators: percentage changes in employment, unemployment rate, gross metropolitan product and real housing prices.
John Caulfield is senior editor at BUILDER magazine.
Learn more about markets featured in this article: Philadelphia, PA.