Oct. 4--With the economy in the rest of the United States on the mend, Michiganders enduring the state's sixth-straight year of recession are waiting to hear four words: "The worst is over."

That kind of pronouncement may still be a ways off as many economists expect Michigan's recovery to lag behind the nation's. But the news isn't completely bleak.

Several key economic indicators are pointing in a more positive direction, giving hope that the bottom of the state's prolonged downturn may be close at hand:

Though monthly initial claims for unemployment benefits in Michigan this year are higher than last year, they have been on a downward trend since January.

In August, the Southeast Michigan Purchasing Managers Index climbed above 50 for the first time since July 2008, a signal of economic expansion. The index tracks new orders, production, employment, supplier deliveries and inventories.

The Michigan Retail Index, a measure of retail sales in the state, has been steadily rising since April, suggesting that retail sales hit bottom in the early spring. The index, however, is still below 50, which means the industry hasn't turned the corner yet.

Though new home building permits in southeast Michigan are at record lows, they have been increasing since February, according to data from Housing Consultants Inc. in Clarkston. Byrne Benson, the company's president, said the region hit bottom four or five months ago.

"We're probably in the early stages of a gentle rebound in the state's economy," said Dana Johnson, chief economist at Comerica Bank.

He expects Michigan's real gross domestic product -- its output of goods and services adjusted for inflation -- to rise at least 2% next year after dropping the last six years.

That would be welcome news for Michigan businesses, many of which are battling sharp sales declines this year.

"This has been our most challenging year," said Joseph Vicari, CEO and president of the Andiamo Restaurant Group, which operates 11 upscale Italian restaurants in metro Detroit.

So far, he hasn't seen any signs of improvement in Michigan's economy. With sales off 15% on average -- and that's after some two-for-one deals -- Andiamo is waiting to see if it will need to offer discounts for holiday parties.

"We're just trying to stay alive until the economy turns around," said Vicari.

At Kelly Services, the giant staffing firm based in Troy, top executives say they have noticed an improvement in metro Detroit.