Economic data point to fragile recovery

The uneven nature of the economic recovery was on display again Tuesday with the release of mixed data on pending home sales, manufacturing and construction spending.

The residential real estate market showed signs of gaining momentum in the new data, while manufacturing appeared to lose steam after a growth spurt over the summer. More troubling, the commercial real estate sector seemed to be in “free fall,” as one analyst put it.

All told, the data did little to help economists assess how fast the economy was growing and whether that growth would be strong enough to generate jobs.

The brightest note came from the National Assn. of Realtors, which reported a strong gain in the number of pending home sales in October -- the ninth straight month it recorded an increase.

The group’s index, which tracks the number of contracts to buy previously owned homes, rose 3.7% from September to October. The reading was up 31.8% from October 2008 -- the biggest annual gain since the index was created in 2001.

The group attributed the rise to the $8,000 tax credit for first-time home buyers. That program was to expire Nov. 30 but it was recently extended to April 30 and expanded to include people who currently own homes. In October, when its fate was still in doubt, buyers rushed to get in under the deadline, the group said.

The economic recovery, many analysts agree, is a fragile one. Its volatility is reflected in the manufacturing and construction numbers, also released Tuesday.

The Institute of Supply Management found that manufacturing continued to expand in November but more slowly.

The index’s reading was 53.6, marking the fourth straight month of expansion. A reading under 50 would signal contraction. But the November results fell below October’s 55.7 reading, evidence that manufacturing activity may be tapering off.

Meanwhile, the closely watched employment component of the index continued to grow, but at a slower pace. The reading was 50.8 in November, down 2.3 points from October.

ElBoghdady writes for the Washington Post.