Amid the gloom - a glimmer

(UPDATED) Two reports out Thursday - February retail sales and jobless claims from last week.

They share two similarities: 1) the numbers in each, while not good, were not as bad as economists expected; and 2) most analysts proclaimed each wasn't really an indicator of improvement.

For retail sales - business at many merchants was not as bad as in January, thanks to Wal-Mart's gains far outpacing expectations. But many stores, especially at the higher end, still struggled.

For jobs - the number of new jobless claims and the total number of people receiving unemployment benefits both dropped more than expected last week. They remain at high levels, however, and combined with previous weeks will make for a dismal monthly report, coming today.

(Update, 9:15 a.m.: The Labor Department said this morning that employers cut 651,000 jobs last month, and the unemployment rate jumped to 8.1 percent. The readings were worse than consensus estimates, but many market participants had braced for even grimmer data. Stocks are expected to rise slightly in morning trading.)

Analysts have long speculated that indicators first need to become less bad before they begin to improve. Are we beginning to see the freefall become more of a tumble?

We asked UNC Charlotte economist Caroline Swartz if the economy is beginning to feel around for a bottom - and why seemingly encouraging news didn't encourage analysts Thursday.

"Each day, we scour the news for signs of hope of the economic recovery," she said. "It's hard to know. A recession isn't a V-shaped decline in the economy, straight to the bottom, and then a rebound straight up.

"The news that retail sales weren't as slow as expected doesn't tell us much. But fewer new unemployment claims is a good sign. On the road to recovery, there are many stops and starts, hopes and disappointments."

She pointed to The Conference Board index, which tracks a number of economic variables, including stock prices, new building permits and unemployment claims. Retail sales are not included.

The index's leading economic indicators increase a few months before the economy recovers, Swartz said. The leading indicators increased in December and January.

We'll know about February later this month, but: "For most of us," said Swartz, "one good sign is welcome at this point."

Your Morning Edge:

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