A cascade of negative economic reports this week is leaving Americans wondering if this is really a recovery from the recession that officially started December 2007 and ended June 2009.
Moody's credit rating agency added to the gloom today when it said it would put the U.S. credit rating under review if Congress and the Obama administration do not make progress on increasing the debt limit, which is currently at $14.294 trillion. Total U.S. debt, thanks to some accounting tricks, tops $14.344 trillion.
The bad news began Tuesday after the Memorial Day holiday weekend, when the closely-watched Case-Shiller Home Price Index showed a double-dip in housing prices. After rebounding in 2009 and 2010, home prices in major metro areas returned to mid-2002 levels in the first quarter.
The Conference Board reported on Tuesday that the Consumer Confidence Index decreased in May after improving in April.
"It's difficult to predict when things are going to turn around," Stephen Bronars, senior economist with Welch Consulting, said. "What everyone is looking for is some sign that that is happening."
On Wednesday, two indicators that showed few new private sector jobs and slow growth in the manufacturing sector led the Dow Jones Industrial Average to close down by 2.2 percent at 12,290.14. During mid-day trading today, the Dow was down 0.35 percent to 12,246.50.
Payroll processor ADP Employer Services estimated there were only 38,000 private sector jobs added in May, much lower than anticipated. Many economists expected over 150,000 new jobs.
The Institute for Supply Management reported on Wednesday that national manufacturing growth slowed in May. The Purchasing Managers Index was the lowest reported for the past 12 months.
U.S. car manufacturers Ford and General Motors reported flat sales in May while Japanese carmakers, Toyota and Honda, reported depressed car sales due to supply disruptions after the earthquake and tsunami in March.
But there was some good news Thursday morning. Initial jobless claims fell 6,000 to 422,000 during the week of May 28, according to the Labor Department.
"When there's a little bit of bad news because of a particular index or a jobs report isn't as good as previous month, that will happen, " Bronars said. "These numbers bounce around a lot."
Bronars said sustained growth in jobs will be cause for valid optimism, but it is unlikely that will come tomorrow.
That's when the Bureau of Labor Statistics will announce May's unemployment rate and nonfarm payroll employment. Bronars said he wouldn't be surprised if unemployment increases slightly from its current national rate of 9 percent.
"I think from the weak ADP report and jobless claims the report will turn out to be less favorable than what we were hoping," he said.
Aidan Manktelow, a senior economist at the Economist Intelligence Unit, said he expects job creation to be above 200,000 again, with significant additions in the manufacturing sector.
"While 200,000-plus job creation each month might support decent GDP growth, even at the April rate of 244,000 jobs a month it would take another 29 months just to get back the seven million jobs lost since the start of the crisis," he said.