Ann Perry
Business Reporter
If less bad is the new good, the economy is looking better than it has for a long time.
In the United States, new applications for jobless benefits dropped unexpectedly to a seasonally adjusted 601,000 last week, their lowest level since January, the labour department reported yesterday.
The U.S. housing market, where the financial crisis began, is also showing tentative signs that it may have hit bottom, some economists said.
Despite losses yesterday, battered stock markets have been on a tear since March, with the S&P/TSX composite index this week briefly climbing over 10,000 for the first time in six months.
And economists expect Canadian unemployment data for April, to be released this morning, to show the pace of job losses is slowing.
All that news has sparked heady talk of "green shoots" and given rise to a new parlour game: predicting the recovery. But economists are sounding a note of caution.
"The reality is we're on the cusp of putting in a trough or putting in a bottom. I think it might be a little too soon to talk about recovery," said Stewart Hall, an economist at HSBC Securities.
Recent data "tends to suggest the rate of contraction is decelerating, and just beyond our fingertips is that economic trough, or that period of economic stabilization, where we begin to put in a bottom. Once you put that bottom in, you can then talk about recovery."
Dale Orr, of Dale Orr Economic Insight, warned "there is never any black and white in these things."
Orr said a turnaround is closer than it was a few months ago. But he noted "people are reacting pretty strongly to the stock markets and they can wander up and down and sideways quite independently from the real side of the economy. That's why people shouldn't get too overly excited."
Business Reporter
If less bad is the new good, the economy is looking better than it has for a long time.
In the United States, new applications for jobless benefits dropped unexpectedly to a seasonally adjusted 601,000 last week, their lowest level since January, the labour department reported yesterday.
The U.S. housing market, where the financial crisis began, is also showing tentative signs that it may have hit bottom, some economists said.
Despite losses yesterday, battered stock markets have been on a tear since March, with the S&P/TSX composite index this week briefly climbing over 10,000 for the first time in six months.
And economists expect Canadian unemployment data for April, to be released this morning, to show the pace of job losses is slowing.
All that news has sparked heady talk of "green shoots" and given rise to a new parlour game: predicting the recovery. But economists are sounding a note of caution.
"The reality is we're on the cusp of putting in a trough or putting in a bottom. I think it might be a little too soon to talk about recovery," said Stewart Hall, an economist at HSBC Securities.
Recent data "tends to suggest the rate of contraction is decelerating, and just beyond our fingertips is that economic trough, or that period of economic stabilization, where we begin to put in a bottom. Once you put that bottom in, you can then talk about recovery."
Dale Orr, of Dale Orr Economic Insight, warned "there is never any black and white in these things."
Orr said a turnaround is closer than it was a few months ago. But he noted "people are reacting pretty strongly to the stock markets and they can wander up and down and sideways quite independently from the real side of the economy. That's why people shouldn't get too overly excited."
