FACTBOX: Checking the U.S. economy's vital signs

WASHINGTON (Reuters) - Data over the next couple of months should provide a clearer signal on whether the U.S. economy is indeed beginning to recover or merely pausing before another downturn.

Most economists think the recession will end in the third quarter, although there is considerable debate over the strength of recovery and the risk of a recession relapse.

Here are some of the vital signs that economists and investors are watching as they track the economy's path:

HOUSING:

* Inventories of unsold homes provide the best forward-looking measure. The latest figures from the National Association of Realtors shows the supply of unsold existing homes was 3.8 million at the end of May. At the May sales pace, it would take 9.6 months to clear that supply.

In 1999, before the housing boom, there was typically a five or six months' supply of unsold homes. Economists say it may take years to get back to that sort of level, but they would like to see the overhang continue to shrink.

Supply has come down by 1.3 months from a year ago and a move below nine months would be an encouraging sign.

JOBS:

* Unemployment tends to keep rising long after recessions end, so even the more optimistic economists think job losses will continue to pile up through the end of the year.

Watch for signs that June's surprisingly weak report, which showed employers cut a net 467,000 positions, was an aberration. Before that report, the pace of job cuts had declined every month since January, when a net 741,000 jobs were lost. Look for that pattern to resume.

* Another key figure from the monthly jobs report is hours worked, which declined in June. Harvard University economist Jeffrey Frankel, who sits on the National Bureau of Economic Research panel that dates the start and end of recessions, has said that is one factor he is watching. It needs to move up to signal a turn in the business cycle.

* Weekly readings on claims for jobless benefits are also worth monitoring. The big number to look for is continued claims, which measures those who remain on the benefit rolls after collecting an initial week of aid.

Goldman Sachs economist Jan Hatzius says a rise of 30,000 per week in continuing claims is consistent with positive GDP growth in the neighborhood of an annualized 1 percent.

These are volatile numbers -- particularly after the bankruptcy of auto makers Chrysler and General Motors threw thousands more people out of work. Still, for the week ended June 20, the most recent data available, the total went down by more than 50,000. If it stays in that area, third quarter GDP may well be in the plus column for the first time since the second quarter of 2008.

SPENDING:

* Consumer spending may get worse before it gets better. Figures for April and May got a boost from government economic stimulus programs, and analysts are looking for a reversal in June. As a result, July and August loom especially large.