Global economy improving but crisis far from over

There were more encouraging reports on the global economy on Thursday.

In the US, first-time claims for jobless benefits rose 27,000 to 640,000 last week but the four-week average fell to 646,750 from 651,000. Sales of previously owned homes fell 3 percent in March, a decline small enough for some analysts to declare that the "plunge is over".

In the euro area, industrial new orders fell a record 34.5 percent in February from a year ago. However, compared to January, it fell a smaller-than-expected 0.6 percent.

In other news that indicate that the recession in the euro area is easing, the preliminary Markit composite eurozone PMI rose to 40.5 in April from 38.3 in March. The services PMI rose to 43.1 in April from 40.9 in March while the manufacturing PMI rose to 43.1 from 33.9.

And on Wednesday, Japan reported that its exports rose 2.2 percent in March, a possible indication that exports may have hit a bottom.

Still, the road to economic recovery will be long. In its latest World Economic Outlook released on Wednesday, the IMF lowered its forecast for global economic growth this year from a growth rate of 0.5 percent to a contraction of 1.3 percent. And on Thursday, IMF managing director Dominique Strauss-Kahn said that the economic crisis remains far from over. From Reuters:

"Despite some red lights and green lights ... our belief is the crisis is far from over," Strauss-Kahn told a press conference on the eve of a regular spring meeting of the International Monetary Fund.

There are "still long months of economic distress in front of us," he said, despite some evidence of economic stability due to the impact of powerful stimulus measures undertaken by authorities. But he reiterated the IMF's forecast that the world economy would recover in the first half of next year.