Economic Recovery Data

The economy is being boosted by higher retail sales, stronger factory output and a rise in companies’ stockpiles. That picture emerged from reports Friday pointing to an economy that’s improving modestly but steadily after the worst recession in decades. Yet the recovery needs stronger job creation, and it remains under pressure from fears that Europe’s debt crisis could slow the U.S. economy. See blog US Economy on Shaky Ground.

The decent gains in payroll employment in recent months have improved the outlook for spending, but economists expect a sub-par recovery because of high unemployment, tight credit and still-high debt loads.

Shoppers are closely watched because their spending accounts for 70% of economic activity. It rose in the first three months of this year at the fastest pace in three years, according to the Commerce Department report. Industrial production also climbed in April, posting an 0.8% gain. Factories, the biggest slice of industrial activity, ratcheted up output by a brisk 1% for a second straight month, the Federal Reserve report showed. Manufacturers have played a leading role in powering the recovery. They are boosting production because companies are starting to restore their depleted stockpiles of goods.

Still, consumers and businesses appear less confident than in previous recoveries. Complicating the outlook is the uncertainty in Europe.

Economists worry that spending could falter in the coming months without more growth in income. But there have been encouraging signs that job growth is picking up. In April, payroll jobs grew by 290,000, the most in four years.

Still, the unemployment rate rose to 9.9% as more people began or resumed job searches a sign that many are feeling more optimistic about the job market.

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