JIM LEHRER: Signs of recovery appeared in parts of the economy today. The National Association of Realtors reported, sales of existing homes were up more than 10 percent in October. They hit the highest levels in two-and-a-half years. The industry was spurred in part by a tax credit for first-time buyers.
But there was less encouraging news about automobiles. The closely watched Fitch Ratings service predicted only a marginal recovery in the industry next year. Wall Street took heart from the housing report. The falling dollar also helped the market. The Dow Jones industrial average gained more than 132 points, to close near 10451. The Nasdaq rose almost 30 points, to close at 2176.
Now Ray Suarez has more of our lead story coverage on the economy.
RAY SUAREZ: And, for that, we get two views, from Mark Zandi, chief economist at MoodysEconomy.com, and Joel Naroff, founder and president of the consulting firm Naroff Economic Advisors.
Mark, when you look at the mixed bag of economic numbers that are coming in day by day, the ones that Jim just cited for us, which do you see, more pointing positive or to a negative result?
MARK ZANDI, chief economist, MoodysEconomy.Com: A positive. The recession, the great recession is over. GDP, the value of all the things that we produce, is now expanding. And, so, we are growing again. So, this is all very good news.
But, of course, we're still losing jobs. And unemployment is still rising, so this recovery that we're in is still a very fragile recovery, and no guarantee that it evolves into a nice, sustaining economic expansion. So, the coast isn't quite clear yet.
RAY SUAREZ: Joel Naroff, are you looking at a mostly positive or a mostly negative picture?
JOEL NAROFF, founder and president, Naroff Economic Advisors: Well, I think, right now, we are seeing some decent growth. But what worries me is what Mark just commented about. It's not that we may have a couple of good quarters of growth, but the rest of 2010 and 2011 look like they're shaping up to be really, really soft.
And this recovery could give us a whole period of substantial -- substandard growth and a lack of jobs, and a big problem as far as the economy goes.
So, I'm looking at it in a situation where this is a head-fake and we have got some concerns going forward.
RAY SUAREZ: A head-fake. What are the key indicators? What are you looking at now that's giving you this mixed look at the early part of next year?
JOEL NAROFF: Well, I think the key factor is the finance sector.
While, yes, it's stabilized, it's not in good shape at all. It's out of the intensive care unit, but into the long-term care unit. And we're not going to see the provision of credit in any manner that we used to see it when the economy began to pick up.
And businesses have a lot of capacity as far as labor is concerned, as far as capital is concerned. They don't have to hire a lot of people. They don't have to do a lot of investment. We're not going to have the bubbles that we had in the last two decades. And we're not going to have the bubbles that we had in the last two decades. We're not going to have the tech bubbles, we're not going to have the housing bubble that really drove us and gave us that extra strong growth.
So, that's the constraints that are out there.
RAY SUAREZ: A bubble-less recovery, Mark Zandi?
MARK ZANDI: Yes, I think so, because I think we have learned a lesson from the tech bubble, the housing bubble. I think it's much less likely that those animal spirits that one needs to create that kind of a bubble are going to come back, at least any time soon.
RAY SUAREZ: Well, what are the key numbers that you're watching and you suggest people at home watch to get a picture of early 2010?
MARK ZANDI: Jobs, jobs. That's key.
One good statistic is the number of people who are filing for unemployment insurance every week. That's a very good real-time barometer of what's going on in the job market. It's come down. If you go back, say, back early this year, it was running around 600,000 per week. That meant, every week, 600,000 people were filing for unemployment insurance. We're now down to 500,000 per week.
That's great, headed in the right direction. But we need to be south of 350,000 per week to get the unemployment rate to start coming down.