Keeping the Good (Economic) News in Perspective

[ProSense]

Keeping the Good News in Perspective

By DAVID LEONHARDT

The most recent batch of economic data has been quite positive. On Thursday alone, three different reports showed that initial jobless claims had fallen, housing starts and the issuance of building permits had both risen and a Federal Reserve index of manufacturing activity rose too.

But before getting too excited about these trends, let’s think back to the early part of this year. Back then, initial jobless claims were falling. Housing starts and the issuance of building permits were rising. A Federal Reserve index of manufacturing activity was rising too.

And then what happened? The recovery stopped. Some people blame the debt crisis in Europe (which, of course, has not ended). Others think we’ll never know exactly what stopped the recovery, because the aftermath of a financial crisis tends to be difficult.

That last point is important. Yes, the latest data has been good. But the economy remains both weak and vulnerable. The notion that a couple of weeks of decent news should cause the Fed to proclaim victory and halt its campaign to lift growth — a notion you’re starting to hear — seems misplaced.

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[MannyGoldstein]

1. The percentage of Americans unemployed continues to increase

e.g., http://www.shadowstats.com/alternate_data/unemployment-charts

This is a great time to be a banker or otherwise rich, but it's a depression for working America.

[ProSense]

2. Well,

at least the predictions of an economic collapse hasn't happened yet. Caution is due.