Here are some thoughts which may be helpful to you .
1. Average weekly unemployment claim declinining is a good sign that economy is at least creating some jobs.As unemployment goes down, there is an upward pressure in the general price level. Fed is using contractionary monetary policy to decrease the money supply which will increase the interest rate , which affects new housing start.
2. Manufacturer's new orders increasing is a good sign that business inventory is declining. Aggregate demand is containing the total production.
3. Stock market index can go up or down in any given day. Unless , there is a continuous increase or decrease, it's not a serious issue.
4. Unemployment goes down-people's income goes up- consumption goes up-aggregate demand goes up-real GDP goes up as well as general price level
5. Fed is worried about this upward pressure in the price level, that why Mr. Bernanke is increasing ineterest rate through decreasing money supply to reduce the inflation
6.As interest goes up, consumer will put hold on buying big ticket items like HD TV, washer, dryer, sound system .
7. As increase in short term interest rate translates into long term interest rate, demand for housing will go down.
8. The inflationary pressure in the economy right now is due to cost push inflation. That means not because people have enough money and are competing for goods but because price of gas is consistently on the rise.
Now, to answer your question, with mixed performance of the current economic indicators, economy is at the last stage of recovery and almost at the point of expansion but high gas price has stopped the expansion process. But economy is not going to see another reccession in near future.
The best action to take right now is to pu a hold on purchasing big ticket items. Invest in gold , and buy US treasury bonds
Hope it helps
