It’s not much fun reading this report:
Friday’s better-than-expected jobs report, while cheering stock investors, hasn’t taken the threat of a double-dip recession off the table.
Even as the jobless rate held steady at 9.7 percent and the 36,000 workers laid off in February was much less than expected, economists and investment analysts said it’s still too early to discount the economy’s chances of revisiting recession.
There are times I am tempted to feel badly for Harry Reid, given that he has the undesired gift of not knowing what to say in sensitive situations. Then, I remember that there are other people who deserve my sympathy more.
36,000 other people, to be exact:
You know something? That’s just heartless. (Via Ed Morrissey.)
In this week’s edition of Coffee and Markets, we’ll talk about the unemployment numbers released this morning and the debate about America’s jobs problem in the context of declines in education.
A monthly poll showed consumers’ confidence took a surprisingly sharp fall in February amid rising job worries. The decline ends three straight months of improvement and raises concerns about the economic recovery.
The Conference Board said Tuesday its Consumer Confidence Index fell almost 11 points to 46 in February, down from a revised 56.5 in January. Analysts were expecting only a slight decrease to 55.
The increasing pessimism is a big blow to hopes that consumer spending will power an economic recovery. Economists watch the confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
The February reading is a long way from what’s considered healthy: A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
The news sent stocks lower, overshadowing retailer reports that showed stronger holiday profits. The Dow Jones industrial average falling 74.29 points to 10,309.09 by midmorning.
As you see, the Great Walkaway, the Big Mulligan, and the Do Nothing ideas all lead more or less to the same place. As a society, we have sustained a huge decline in asset values as the housing bubble popped. And we’re going to spread out the impact of the decline and suffer it in a socialized way. Several more years of economic weakness are ahead, no matter what happens here.
Tyler Cowen on the fraud that is “fair trade.”
Market participants will pay very close attention to two key upcoming readings on employment. This morning, the Labor Department reports initial claims for unemployment for last week. And tomorrow, they’ll give the initial reading (subject to revision) on job creation in November. A sense is growing that the readings will surprise on the upside, and show an employment picture that is improving slowly but steadily, suggesting that economic conditions are finally on the mend.
I have no doubt that Krugman is a smart guy–I have said so many times, and I have said that his Nobel Prize was richly deserved. But he does so much to make one lose one’s high opinion of him.