Gloomier economic forecasts, by the likes of Martin Feldstein, a Harvard University economics professor and a member of President Obama's Economic Recovery Advisory Board, have pushed the turnaround well into next year, according to a Reuters interview yesterday.
Even relatively optimistic economists are quick to warn that not too much should be read into reports like those released yesterday by the Commerce Department on new-home sales and durable-goods orders.
New-home sales in February jumped 4.7 percent to an annual pace of 337,000 from a record low in January. February marked the first increase in sales since the summer, and the report added to a string of "better-than-expected" housing data, according to Wachovia Bank economist Adam G. York.
New orders for computers, machinery, and other durable goods climbed an unexpectedly strong 3.4 percent in February. "This was a surprisingly strong bounce in view of the severe global recession," said Brian Bethune, chief U.S. financial economist at IHS Global Insight Inc., "but we would not read too much into it."
He said he expected the overall downward trend to continue for several months.
Zandi called the climb in durable-goods orders a hopeful sign and pointed to other reasons for optimism, including the rally in the stock market. "That's important in terms of the collective psyche," he said.
The Standard & Poor's 500 stock index has gained 20 percent since March 9 - when it closed at a level last seen more than a decade before. The Dow Jones industrial average has risen 18.4 percent in the same time.
Yesterday, the Dow closed up 89.84 points, or 1.17 percent, at 7,749.81, while the S&P rose 7.63 points, or 0.95 percent, to 813.88.
The market has rallied before during this crisis, only to fade amid renewed doubts.
