New signs that the recession could be nearing a bottom emerged today, as factory orders were far better than expected and the Dow industrials surged over 8,000 for the first time in two months. The Commerce Department said orders for manufactured goods rose 1.8% in February, reversing six straight monthly declines and easily beating estimates of another drop. Other economic indicators came in better than expected Wednesday, including construction spending and pending home sales.
Meanwhile, world leaders meeting today in London pledged $1.1 trillion to global institutions such as the International Monetary Fund to combat the downturn. And the European Central Bank agreed to cut a key interest rate to a record low of 1.25%. Still, the job situation remains grim. Traditionally, the labor market doesn’t pick up until well after a recovery has started. The monthly unemployment report due out Friday likely will be dismal, and new jobless claims reported today were worse than expected.
