Don’t look back — the economy may be gaining on us. Two key economic indicators in the past few days suggest that the May jobs report may not have been as much of a fluke as some suspect. Consumer demand returned with a vengeance last month even with the limited reopening that took place in a handful of states, and not just for on-line purchases, either.

Not all of the economic news is good, however. Let’s start with the bad news, which is that initial jobless claims are leveling out — but at a level roughly twice as high as the pre-COVID-19 record:

In the week ending June 20, the advance figure for seasonally adjusted initial claims was 1,480,000, a decrease of 60,000 from the previous week’s revised level. The previous week’s level was revised up by 32,000 from 1,508,000 to 1,540,000. The 4-week moving average was 1,620,750, a decrease of 160,750 from the previous week’s revised average. The previous week’s average was revised up by 8,000 from 1,773,500 to 1,781,500.

The advance seasonally adjusted insured unemployment rate was 13.4 percent for the week ending June 13, a decrease of 0.5 percentage point from the previous week’s revised rate. The previous week’s rate was revised down by 0.2 from 14.1 to 13.9 percent. The advance number for seasonally adjusted insured unemployment during the week ending June 13 was 19,522,000, a decrease of 767,000 from the previous week’s revised level. The previous week’s level was revised down by 255,000 from 20,544,000 to 20,289,000. The 4-week moving average was 20,421,250, a decrease of 329,750 from the previous week’s revised average. The previous week’s average was revised down by 63,750 from 20,814,750 to 20,751,000.

That turned out to be a rather big miss on economists’ expectations of 1.35 million new claims for this week, which itself wouldn’t be a good number. It’s also the second week in a row that the results were worse than expected, which had a predictable effect on markets this morning. Some of the bad news has a silver lining as well, of course. The number did decline slightly from last week, and continuing claims dropped rather dramatically. However, the continuing flood of these claims — which are initial, from job losses over the previous two weeks — shows that the jobs market is still under severe strain. We are seeing an unprecedented churn-and-burn in jobs, and that alone will likely require more targeted government aid to support payrolls.

However, today’s report on durable goods orders in May show an economy ramping up. After two straight months of double-digits declines, durable goods rebounded sharply last month with a 15.8% increase, mostly in transportation goods:

New orders for manufactured durable goods in May increased $26.6 billion or 15.8 percent to $194.4 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed an 18.1 percent April decrease. Excluding transportation, new orders increased 4.0 percent. Excluding defense, new orders increased 15.5 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $20.9 billion or 80.7 percent to $46.9 billion.

Shipments of manufactured durable goods in May, up following two consecutive monthly decreases, increased $8.4 billion or 4.4 percent to $198.5 billion. This followed an 18.6 percent April decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $5.0 billion or 12.1 percent to $46.5 billion.

Inventories increased too, another sign of optimism, but only slightly. However, capital goods — a signal for business investment — went up 27%:

Nondefense new orders for capital goods in May increased $13.4 billion or 27.1 percent to $62.8 billion. Shipments increased $0.3 billion or 0.4 percent to $63.5 billion. Unfilled orders decreased $0.7 billion or 0.1 percent to $624.0 billion. Inventories increased $1.1 billion or 0.6 percent to $191.2 billion. Defense new orders for capital goods in May increased $2.2 billion or 19.9 percent to $13.3 billion. Shipments decreased less than $0.1 billion or 0.1 percent to $12.4 billion. Unfilled orders increased $0.9 billion or 0.5 percent to $180.0 billion. Inventories decreased $0.1 billion or 0.4 percent to $21.0 billion.

Those are fairly impressive signals that recovery has begun — even if it still lags the initial damage in March and April from shutdowns. A more direct metric for consumer demand also turned strongly positive yesterday, as Reuters noted, which also looks like recovery has begun:

Sales of new U.S. single-family homes increased more than expected in May and business activity contracted moderately this month, suggesting the economy was on the cusp of recovering from the recession caused by the COVID-19 crisis. …

New home sales jumped 16.6% to a seasonally adjusted annual rate of 676,000 units last month, the Commerce Department said. New home sales are counted at the signing of a contract, making them a leading housing market indicator. Last month’s increase left sales just shy of their pre-COVID-19 level.

Sales dropped 5.2% in April to a pace of 580,000 units. Economists polled by Reuters had forecast new home sales, which account for about 14.7% of housing market sales, rising 2.9% to a pace of 640,000 in May.

New home sales are drawn from building permits. Sales surged 12.7% from a year ago in May. The report followed on the heels of data last week showing home purchase applications at an 11-year high in mid-June and permits rebounding strongly in May.

The June jobs report will be interesting to see in light of these indicators. Will it show more of a gain from manufacturing, construction, and retail from these reopening signals? Or will jobless claims catch up to the jobs report in June? We’re a week away from getting an answer to that, plus a month away from getting the initial second-quarter GDP report, which will almost certainly still look like a massive crater. Today’s final -5.0% Q1 GDP just didn’t capture most of the economic damage from the COVID-19 shutdowns, and a double-digit decline is all but built into Q2 expectations. Some think it could get as bad as -30%, but these indicators show much of the damage already beginning to reverse itself.

If these numbers are correct and indicative, though, it looks like the worst is already behind us. Jobs markets always lag the highs and lows, but the continuing high level of those initial claims are still worrisome.