In spite of the reasons for caution, many business executives say they are prepared to move ahead with hiring and investment growth plans despite their lingering uncertainties about the outlook.
After more than two years of frustrating fits and starts, the U.S. economy is showing signs of moving onto firmer ground. A host of reports Thursday underscored that point, as well as the perils that persist.The number of Americans filing initial claims for government unemployment benefits has fallen to levels last seen before Lehman Brothers collapsed, the Labor Department said. The stock market, a leading indicator of growth, is off to its best start this year since 1998 and notched more gains Thursday. Meantime, consumer confidence has reclaimed ground lost last year, and another report showed that income growth is firming.However the economy is far from robust. Government and company reports showed consumer spending has been mixed. And the manufacturing sector, though on the rebound, isn’t booming, according to a survey of manufacturing purchasing managers by the Institute for Supply Management.There are other reasons for caution about the latest signs of growth. In 2010 and 2011, the recovery seemed to start the year with momentum but petered out by summer. Instability in Europe, the Middle East and elsewhere could push up gasoline prices or threaten the recovery in other ways after disrupting growth last year. Oil futures jumped in after-hours trading Thursday on rumors a pipeline exploded in Saudi Arabia.
By Ben Casselman and Jon Hilsenrath, Mar 2, 12 WSJ