Many economists expect the government Friday to revise lower its growth estimate for the April-June quarter to below 2 percent. That’s weak in normal times and even worse after such a steep recession.
The housing sector, which usually helps power economic recoveries, is now acting as a drag. New home sales fell 12.4 percent in July to the lowest level in nearly a half-century, the government reported Wednesday. And another report this week showed that sales of previously occupied homes fell to their lowest level in 15 years. Sales are plummeting after a popular homebuyer’s tax credit expired April 30.
Jobless claims fell steadily last year as the economy began expanding, dropping from a peak of 651,000 in March 2009 to about 460,000 at the beginning of this year. After fluctuating around that level for most of this year, claims started climbing again last month.
In a healthy economy, claims generally fall below 400,000.
Some companies are still cutting workers. Northrop Grumman Corp. said Wednesday that it will lay off 642 workers at its shipyard in Pascagoula, Miss., by the end of the year. The shipyard currently has 11,000 employees.
And in late July, a NASA private contractor, the United Space Alliance, began telling 1,400 employees that they would be laid off in the fall as the U.S. space agency ends the space shuttle program.
The United Space Alliance is owned by Boeing Co. and Lockheed Martin Corp. and has 8,100 employees.
AP Business Writer Tali Arbel contributed to this report.