US economy shows signs of improvement, but challenges remain

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BEIJING, Apr 15 (Xinhua): Positive government reports and confident speeches by political heavyweights signaled improvement for the US economy, but analysts have warned of excessive optimism.
President Barack Obama said Friday the recession-hit US economy was showing "glimmers of hope" despite lingering strain.
Lawrence Summers, director of the White House's National Economic Council, on Thursday predicted the US economy will end its "free fall" in a few months.
"I think we can be reasonably confident that that's going to end within the next few months, and you will no longer have that sense of free-fall," Summers told the Economic Club of Washington.
The remarks are not baseless white lies fabricated by politicians to boost morale as they are backed up by real economic data.
The Commerce Department reported on April 2 that factory orders rose in February for the first time in seven months, reflecting a rebound in demand for construction machinery, computers and air conditioning equipment. The 1.8 per cent increase was larger than previously estimated.
Meanwhile, consumer spending rose 0.2 per cent, a second straight month of increase after a record six consecutive months of declines, the Commerce Department reported on March 27.
Sales of new homes also put up a growth of 4.7 per cent in February to a seasonally adjusted annual rate of 337,000 units, according to a March 25 report.
Sales of existing homes rose unexpectedly by 5.1 per cent in February to a seasonally adjusted annual rate of 4.72 million units, the National Association of Realtors reported on March 23.
There are also signs that confidence is being rebuilt too, especially after the G20 summit where participating countries pledged sizeable measures to counter the global economic crisis.
The Dow Jones Industrial Average rallied over 8,000 points on April 3, pointing to the optimism on the stock market.
According to the latest New York Times/CBS News poll, the per centage of people who said the economy was getting worse has declined from 54 per cent just before Obama took office to 34 per cent now. And 20 per cent now think the economy is getting better, compared with 7 per cent in mid-January.
However, Summers warned that there were still challenges ahead. His remarks were echoed by many observers, who have pointed out that a foreseeable end of a "free fall" is by no means recovery and there are still problems unaddressed in the world's biggest economy.
The U.S. unemployment rate rose to 8.5 per cent last month, the highest since late 1983, the Labor Department reported on April 3. Things are expected to get worse and the jobless rate could reach 10 per cent, said the report.