U.S. Leading Indicators Continue to Rise
The United States economy continues to recover at an accelerating pace, new reports show, but worries persist about the fragility and duration of the economic turnaround.

The Conference Board's latest Leading Economic Index (based on manufacturing hours worked, consumer expectations, share values and other key indicators) shows a 1 percent gain in September, following a 0.4 percent rise in August and 1 percent increase in July. Announced last week, the monthly data for September marked the sixth straight month of growth in the index and the fastest rate of improvement since 1983.

Positive signs also came from the U.S. Federal Reserve's new Beige Book report, which found indications of stabilization or modest improvement in various sectors across all 12 Federal Reserve districts, with the largest gains in business conditions among residential real estate and manufacturing industries.

"These numbers strongly suggest that a recovery is developing," Ken Goldstein, an economist at The Conference Board, said of the firm's findings. "However, the intensity of that recovery will depend on how much, and how soon, demand picks up."

Jobless Rate May Remain High as Economy Recovers
Even though many sectors are currently experiencing a recovery, the U.S. economy is struggling to create new jobs and continues to shed positions, increasing concerns over a jobless turnaround in the near future.

According to the latest weekly claims report from the U.S. Department of Labor, seasonally adjusted new initial claims for unemployment climbed to 531,000 for the week ending October 17, an increase of 11,000 over the previous week's total. The increase in claims followed a decline of 49,113 in the previous weekly cycle, and brought the four-week moving average to just 750 claims below the previous week's average.

The unemployment rate rose in 23 states in September, bringing the national rate to 9.8 percent. Many of the states that lost jobs showed a decline in the unemployment rate, however, as discouraged workers gave up looking for new positions, making them no longer count as officially unemployed, the Associated Press reports.

A separate AP report explains how the job market is trapped in a "vicious circle": Without new jobs being created to alleviate rising unemployment, U.S. consumers are unlikely to increase their spending, but without that spending, businesses see little encouragement to resume hiring.

Administration Launching Small-Business Initiatives
"After enduring months of criticism that his administration had done too little to help small businesses weather the recession," President Barack Obama last week said that "'there's still too little credit flowing to our small businesses' and unveiled initiatives he said would open the spigot," according to the New York Times.

To free up credit, the president announced at a small records storage company in Maryland that the administration would be making more credit available to the small local and community banks on which many small businesses depend, and he called on Congress to increase the size of popular Small Business Administration (SBA) loans.

The new focus of the Treasury Department's Troubled Assets Relief Program (TARP) "will be on aiding small businesses, which are seen as vital to the economic recovery because they employ so many workers, as well as the ailing housing market," the Washington Post reported last week. "Under the administration's plan, small companies will be able to get low-interest loans through local banks with less than $1 billion in assets. Those institutions will be allowed to borrow from TARP at a 3 percent rate, lower than its usual 5 percent."

Banks will be required to submit plans on lending to small businesses and present quarterly progress reports to regulators. In addition, community groups that lend to low-income areas under a Treasury Department program "will be able to borrow relief money at just 2 percent annually for eight years," the Times reports.

The measure would also raise the loan cap on how much a company can borrow from several major SBA lending programs from $2 million to $5 million.

China's Growth Accelerates
"China's economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession," Bloomberg News reports. "For the first nine months of this year, the economy grew 7.7 percent, with domestic demand accounting for all of the advance," according to Bloomberg.

China's economy rose 6.1 percent year-on-year in the first quarter of 2009, 7.9 percent in the second quarter and 8.9 percent in the third quarter, the state-run Xinhua news agency reports based on data from the National Bureau of Statistics. China also announced Thursday that its expansion in industrial output, "the backbone of the manufacturing-heavy economy," accelerated to 13.9 percent in September from 12.3 percent in August. (Source: The Wall Street Journal)

"China has said it is on track to hit its growth target of 8 percent this year, after the economy grew 8.9 percent from a year ago in the third quarter," BBC News reports.

CFOs Remained Concerned Over Recession
Roughly 38 percent of CFOs in the manufacturing sector do not expect to see the U.S. emerge from the economic downturn until at least the second half of 2010, according to results of a new survey of manufacturing CFOs and senior comptrollers.

The survey, published by accounting advisory firm Grant Thronton LLP this month, found that 27 percent of CFOs expect the recession to end in the first half of 2010 and 15 percent predict it will be over by the end of 2009. However, 20 percent of CFOs also believe that the recession will last until 2011 or beyond.

The top concerns for manufacturing CFOs, according to the survey, are the cost of employee benefits (73 percent), followed by raw materials (63 percent). However, only 32 percent of respondents claimed energy prices are a major concern, 25 percent expect to raise prices within the next six months and 63 percent expect to maintain current price levels over the next six months.