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Numbers show recession could be nearing end

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It's certainly too early to celebrate an end to the national recession, but credible analysts are reading new numbers and suggesting the beginning of the end is under way.

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The latest encouraging sign was last week's July unemployment report, which was surprising in that it was not as bad as expected. That is, fewer jobs were lost than economy-watchers predicted. If the trend continues in August, it will suggest the economic free fall has bottomed out because the jobless rate always lags behind other indicators of recovery.

Another key measure of economic health - the index of leading economic indicators - climbed 0.7 percent in June after increases of 1.3 percent in May and 1.1 percent in April. The index is compiled by the New York Conference Board. The private research group concluded that the economy's worst recession in 70 years is easing.

Among the factors cited by the board: smaller job losses, measurable stabilization of the housing market, rising stock prices and more stability in manufacturing. Taken together, the indicators paint a picture far less bleak than six months ago.

The Conference Board also said efforts to reverse the financial crisis may be working, specifically the actions of the Federal Reserve to stabilize the banking system.

Lesser-known elements of the Conference Board's report, such as ratios and diffusion indexes, also support the proposition that the recession is ending. Statistical analyses can be dense, but the eyes-glaze-over details confirm the relatively good news. There appears to be some light at the ends of the economy's many tunnels.

The diffusion index, for example, is a compilation that shows the strength of the leading index. The diffusion number was positive in June for a third consecutive month. Another measure, the benchmark 10-year Treasury note rate, has been rising.

Impenetrable economic statistics, as good as they seem to be, mean little to the worker who's lost a job or the small business on the brink of shutting the doors because of lagging sales. The most meaningful sign of recovery for most Americans will be when employers end the cycle of layoffs and begin rehiring and hiring. That's happening in a few sectors, specifically health care and education. But overall, job losses continue, albeit at a lesser rate.

Nonetheless, the latest numbers look better than they have in many months. There is reason to believe the worst is over.

THE FORUM

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