WASHINGTON — Glimmers of hope for the economy — better home sales and higher demand for goods, plus optimism from the White House and a nearly 20 percent rally in stocks — have some people wondering if the worst is over.
Not so fast, say many economists. Layoffs are still mounting and home prices are still falling in an economy shrinking at an alarming rate. A recovery anytime soon doesn't seem likely.
"We may be seeing the end of the beginning of this recession, but it is not the beginning of the end of the downturn," said David Wyss, chief economist at Standard & Poor's in New York.
Still, the recent news has been better than expected. On Wednesday, the Commerce Department said demand for big-ticket manufactured goods, which had fallen for six months in a row, actually rose by 3.4 percent in February.
Also reports this week have shown sales of new and existing homes rising by about 5 percent last month.
And President Barack Obama struck a more hopeful tone during his news conference Tuesday. "We're beginning to see signs of progress," he said, adding that Americans should have a "renewed confidence that a better day will come."
"The good news is that we don't have the sort of unrelentingly persistent declines we had been seeing," said Nariman Behravesh, chief economist at IHS Global Insight, who thinks the economy "may be approaching a bottom."
The GDP fell at an annual rate of 6.2 percent in the fourth quarter. Behravesh expects an even more severe decline for this quarter, and even a slight positive by the end of this year.
For now, in key areas of the economy, there are signs of life and reasons to believe the worst is not yet over.
Orders for manufactured products expected to last at last three years, or durable goods, rose last month for the first time since July. Economists were expecting them to fall.
Orders are still below their levels of a year ago, and analysts believe they will remain low because of weak demand here and overseas for cars and other big-ticket items.
On the housing front, new-home sales rose 4.7 percent in February from a month earlier, and the government revised January's figures higher. It was the first monthly gain for new home sales since July, perhaps a sign that developers have slashed prices and construction so much that sales have finally hit bottom.
Builders still face competition from foreclosures, and there's still a mountain of unsold homes. The results from February were still the second-worst in records that have been kept since 1963. Experts are waiting for several months of increases before declaring the worst is over.
"For me to be encouraged, I'd have to see a trend," said Barclays Capital analyst Michelle Meyer.
Sales of previously occupied homes went up 5.1 percent in February from the month before, as buyers took advantage of declining prices. Also, mortgage rates are historically low, and a new $8,000 tax credit for first-time home buyers also could further lift sales.
Still, it's too early to proclaim a comeback. Existing-home sales are still the lowest they've been in a more than a decade. Mounting layoffs are likely to keep many buyers on the sidelines, and thousands of foreclosed properties have yet to go up for sale. That's likely to push prices down even more, analysts say.
At the checkout counter, shoppers bought a few more necessities in February, offering some hope for stores. Retail sales only dipped 0.1 percent, and they rose in January.