With a spate of good economic reports, 2013 is shaping up as a rebound year for the economy. Here’s what the evidence is showing for the rest of the year:
Given that track record, the safest prediction would be that the second half of 2013 will offer more of the same: job gains in the range of 150,000 to 200,000 per month, with the jobless rate falling slowly. Indeed, some key indicators for the job market point in the same direction. For example, the number of people filing new claims for unemployment insurance benefits, a useful leading indicator of jobs, has been moving steadily downward, but in recent weeks it has been locked in the same pattern of the past year or two.
That may dampen investment and spending that have been spurred by low interest rates. In particular, it will be a test of how resilient this housing recovery truly is. Housing starts were 29 percent higher in May than they were a year earlier, but those gains were driven in no small part by low mortgage rates that made homes more affordable. Anecdotal reports have pointed to demand for homes surging as consumers rush to take out mortgages before rates rise further. But over time, higher rates will mean homes are less affordable, which could work against the recovery.