NEW YORK (CNN/Money) - Thursday's economic data painted a schizophrenic picture of the U.S. economy -- a little good news, a little bad -- leaving economists sharply divided about the next course of action for the Federal Reserve.

On the one hand, new weekly claims for unemployment benefits jumped to their highest level in more than a year, staying well above the benchmark 400,000 level that indicates the labor market is getting worse.

On the other hand, orders for big-ticket, long-lasting goods like cars and appliances stunned economists with a strong jump in March. Even excluding spending on defense and airplanes, the "core" reading on business investment seemed to indicate that corporate demand was improving -- something that economists consider crucial for a pickup in the world's largest economy.

Stuck in the middle are Federal Reserve policy-makers, who have been crossing their fingers that the end of the U.S.-led war with Iraq will clear the decks for an economic recovery, justifying the do-nothing approach the central bank has taken in the past several months.

"The longer the Fed drags this out without cutting rates, the more they're admitting they don't have much firepower at all," said Rory Robertson, interest rate strategist at Macquarie Equities (USA). "They're sitting on their hands, hoping for the best."

Many economists wondered if a late Easter holiday played a part in last week's big jump in jobless claims. While seasonally adjusted claims rose, non-adjusted claims actually fell by 39,000 or so, a hint that seasonal factors were playing havoc with the numbers, as they sometimes do.

Nevertheless, trying to pretty up the numbers -- the less-volatile four-week moving average rose to its highest level in a year, and jobless claims have been above 400,000 for 10 straight weeks -- was a little like trying to put lipstick on a pig.

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"There may be some adverse seasonal effects at work in the claims numbers, thanks to the late Easter, but the underlying trend is surely unfavorable," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. "A reversal requires a quick and steep recovery in business confidence."

That recovery has not yet made an appearance. In poll after poll, CEOs express their worries about the health of the economy and offer no indication they plan to spend much more than is absolutely necessary to keep production steady.

And even the most optimistic economists doubt businesses are actually going to start hiring workers for some time, until they can see the whites of the recovery's eyes. As a result, the unemployment rate has been sitting at or above 5.8 percent since December 2001, following the brisk layoffs that came after the Sept. 11 attacks.

The Labor Department is due to report on April unemployment and payrolls next week, and the picture's certainly not going to get any prettier. Economists, on average, expect the unemployment rate rose to 5.9 percent from 5.8 percent in March and forecast that employers cut 59,000 jobs from payrolls outside the farm sector after cutting 108,000 in March, according to a Reuters poll.

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If next Friday's jobs report is worse than economists expect -- and the recent rise in jobless claims seems to indicate it will be -- some analysts think the Fed might feel forced to take some action.

"All eyes will now shift to next week's employment report. The figures we've seen over the past few weeks suggest it will be quite weak," said Oscar Gonzalez, economist at John Hancock Financial Services Inc. in Boston. "The report may be enough to push the Fed into giving the economy another shot in the arm at their next meeting."

The central bank has made only one interest-rate cut in the past 18 months, and 12 out of 21 economists surveyed recently by Reuters think the Fed will leave rates alone at its May 6 and June 24-25 policy meetings.

Some economists think that even if next week's jobs report is surprisingly ugly, the central bank will still sit on its hands, content to take the view that the economy is already set to recover in the long run.

The Fed has, after all, preached for months the gospel that high productivity -- output per worker hour rose 4.8 percent last year, the best performance since 1950 -- will boost corporate profits, sparking a broader recovery in business demand, spending and hiring.

Meanwhile, business inventories are still 6 percent lower than their November 2000 peak; there has not been such a lasting shelf-clearing since the Commerce Department started keeping track in 1992.

With a tax-cut plan almost certain to be passed later this year, interest rates at their lowest levels in more than 40 years, lean inventories and a highly productive work force, many economists believe businesses are like tightly coiled springs, ready to bounce broader economic growth higher.

"There's nothing to get cocky about, but it looks like a lot of the things inhibiting growth have been in retreat," said UBS Warburg senior economist Steven Weiting. "We had the war, terrible winter weather and energy shocks, but we still grew through it. If we can grow through that, I don't know what else could prevent a recovery."

Weiting and many other economists believe economic growth of more than 3 percent is entirely possible -- positively roaring, compared to the anemic 1.4 percent rate in the fourth quarter of 2002.

With these positives in mind, the Fed seems more likely to wait a while to see how the numbers unfold. It hinted as much in its periodic "beige book" report of national economic conditions, released Wednesday, saying it was "too early to ascertain the full effect of the war on both consumer and business confidence."

"It's too early to see anything show up in the numbers," said former Fed economist Wayne Ayers, now chief economist at Fleet Boston Financial Corp. "We won't see it until the end of the second quarter or, more realistically, the end of the third quarter."