U.S. economy continues to send mixed signals - 13 WTHR Indianapolis

U.S. economy continues to send mixed signals

Updated:
New home construction is down one percent. New home construction is down one percent.
Home sales were also down. Home sales were also down.
Target's second quarter profit was down six percent. Target's second quarter profit was down six percent.

Rich Van Wyk/Eyewitness News

Indianapolis - There are more mixed signals on the health of the U.S. economy. Despite rising stock prices and lower wholesale prices, new home sales and real profits are down.

Surviving in the recession for many families is a walk through the park. Jeff Klein lost his job and now supports his family as a self-employed handyman.

"We came here to the park today, because it doesn't cost a lot of money to do this," Klein said.

When it comes to spending money, consumers are still being cautious. New home construction slipped one percent in July. Home Depot's second quarter profit fell seven percent and Target's dropped more than six percent.

However, wholesale prices, including food and gasoline are down. Despite good economic signs, consumer confidence is still on a slide.

"There is no obvious sign but unemployment and that keeps going up. That's the bad news," said Butler University Economics Professor Bill Rieber.

Even for people like Aline Swanson and her husband, who both work.

"I feel terrified watching my neighbors losing their jobs and watching people not bringing home what they used to," Swanson said.

It is a vicious circle. Consumers aren't spending because companies aren't hiring. Companies aren't hiring because consumers aren't spending.

But the government is, employing all kinds of workers.

"The reason for the government stimulus program is to try to break that and the Federal Reserve trying to unclog the financial market so lending increases," Rieber said.

It's a complicated economic web. With no quick, easy way out, consumers are holding on tight until they're certain the economy is on solid ground.

Another signal Tuesday is that General Motors is increasing production as the government's "Cash for Clunkers" program increases sales. The boost is enough to recall roughly 1,300 laid-off workers and increase hours for workers still on the job at several factories.

Powered by WorldNow