Economic Reports Show Some Signs of improvement - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Economic Reports Show Some Signs of improvement

WASHINGTON. - Analysts say the economy may no longer be in free-fall but the road to recovery is slow, at best.

Retail sales edged up for the month of June and were higher than expected, but with a catch.

For the second straight month energy, gasoline and food prices drove the increase, not clothing and electronic sales.

For electronic giants like Dell, it means lowering second quarter profit expectations as consumers curb spending on big ticket items and keep laser-like focus on the basics.

Analysts say necessity spending will rule the rest of this year.

For off-price and discount chains, it has underscored the new economic mindset of less is more.

With unemployment at a 26-year high consumers and businesses are not ready to throw caution to the wind.

On Tuesday President Obama warned unemployment will climb for several more months, but says there are signs the economy and credit is beginning to thaw.

"Small businesses that might have worried just a couple months ago about closing doors they are now able to get a little more financing," he said. "That means they are less likely to lay off workers."

Some experts say we could soon see the start of hiring opportunities.

"What we did see was an increase in the percentage of firms with job openings, which they are having some trouble filling, and an increase in the net percent of firms who plan to create jobs," says NFIB chief Economist Bill Dunkelberg.

There are also signs Wall Street's financial firms, where many say the economic crisis began, are showing a pulse following near collapse.

Goldman Sachs is posting big profits just one month after paying back $10 billion in federal aid.

Still, the financial sector is not cured yet.

Many commercial lenders are still struggling and may need more emergency funding from the government.