Despite better housing market, economists see few hopeful signs for growth

Washington - Hiring picked up much faster in July than expected. Car sales remain solid. Home prices are climbing again in parts of the country. It all points to a strong second half of 2012, right? Not necessarily.

Weighing against growth are the ongoing debt crisis in Europe, a clear slowdown in China and uncertainty over a bitter presidential election, expiring Bush-era tax cuts and the possibility of steep, across-the-board cuts in government spending.

That's led most economists to predict sluggish growth at best for the latter half of the year.

"It's kind of what I call a very uncomfortable economy," said Mark Zandi, the chief economist for forecaster Moody's Analytics and a frequent witness before Congress.

Even Zandi's silver lining - that construction will add growth in the second half of the year, pulling the annualized growth for the year to 2 percent or better, up from the second quarter's 1.5 percent - "means we make no progress on unemployment." With the jobless rate at 8.3 percent, "it means the economy is very vulnerable to what could go wrong," he said.

Kate Warne, an economist and market strategist for the investment firm Edward Jones, told a recent economic roundtable at the U.S. Chamber of Commerce that there are reasons for optimism, one of them being improvement in the housing sector.