More signs of an improving recovery

Banks are finally lending money to businesses at levels that amount to something - specifically, expansion and new jobs. Commercial lending is often one the last things to turn in a business cycle, economist Mark Zandi tells the WSJ, and numbers being reported by the major banks would indicate that the turning is well underway.

Coming off the dramatic lending drop after the crisis struck, these increases are modest. The amount of business loans outstanding remains well below historical levels. In addition, new activity varies significantly from bank to bank and industry to industry. Still, the uptick is notable, say banking analysts. Whereas the crisis forced banks to tighten lending standards and focus on restructuring problem loans, "as banks get healthier, they get more rational and reasonable about normal risk taking," said the CEO of J.P. Morgan Chase's commercial bank, Todd Maclin.

Also encouraging comes this morning's report that new claims for jobless benefits plunged by 34,000 last week, to 388,000. That's the first time the figure fell below 400,000 since July 2008. The four-week moving average, which is considered a more reliable indicator, fell to 414,000. If the numbers remain below 400,000 it would almost guarantee that the jobless rate will start to fall. But the data could be skewed because of the holiday season, which might explain why the stock market is not responding to the news.

One more bit of good news: Businesses expanded in December at the fastest pace in two decades, according to the Institute for Supply Management-Chicago. From Bloomberg:

"The economy is gathering momentum," John Silvia, chief economist at Wells Fargo Securities Inc. in Charlotte, North Carolina, said in an interview on Bloomberg Television. "New orders will follow the better business confidence that is showing up. Once the American consumer starts kicking in, we will see stronger orders data."