The little recovery that couldn't: A sudden spate of worrisome economic data sours the short-term outlook
One bad economic data blip is easy to ignore. When jobless claims jumped up sharply a week ago, analysts blamed Easter-related calendar irregularities and warned that there is always a lot of “noise” in a weekly data series. But then the number of new claims remained uncomfortably high in the report released yesterday, and brows started furrowing everywhere (except, perhaps, in Mitt Romney’s campaign headquarters.)
Suddenly, the four-week moving average, a gauge designed to smooth out all that weekly noise, was up to its highest point since January. Coming on top of a weaker-than-expected labor report for March, signs that industrial production growth is slowing, and continued softness in housing, the conventional wisdom on the state of the economic recovery took a swift turn for the bearish. The New York Times and Wall Street Journal immediately published nearly identical articles, “Fears Rise That Economic Recovery May Falter in the Spring,” and “Economic Signals Stir Worries.”
We’ve seen this movie before. Last year, at almost exactly the same point in the spring, a nascent recovery curled up in the fetal position and expired. But that time around, there were obvious reasons for the slowdown: the earthquake-tsunami-nuclear disaster in Japan, panic over the European sovereign debt crisis, a Libya-related gas price spike, and the prospect of a government shutdown.
This time, there haven’t been any disasters to shake up global supply-and-production chains. Europe, while still a mess, doesn’t seem as perilously close to implosion as it did a year ago. Yes, gas prices spiked again, but may already have peaked. All of which, paradoxically, contributes to a sense of greater unease. If there are no clear external factors explaining the sputtering U.S. recovery, then maybe the relatively strong performance at the end of 2011 and beginning of 2012 was just a mirage.
Except, here’s what we do know. By just about every measure, the U.S. economy is significantly stronger now than it was a year ago. Retail sales are up, auto sales are surging, and labor markets are much more stable. Tax receipts for most states have exceeded their pre-recession highs. American households are loaded down with less debt. Estimates of GDP growth for the first quarter of 2012 have steadily risen over the last two months. In the long-term, a very slow recovery still appears to be solidly in place. That’s good news for the United States.
But with a presidential election seven months away, America’s attention is all focused on the short-term. And from a Democratic perspective, time is fast running out for an economic recovery to have any meaningful positive effect on Obama’s chances for retaining the White House. The opposite may be more likely to be true: If elevated jobless claims translate into another weak labor report for April, negative sentiment about the state of the economy may solidify, regardless of whatever long-term trends are in place.
The first round of polling since Mitt Romney locked down the Republican nomination for president suggests that the election in November will be excruciatingly close. A strong economic recovery, consolidating throughout a long summer, could have changed that calculus. But as of right now, the economy is saying, as clearly as we can interpret its muddled, contradictory, constantly shifting signs: Don’t look to me for help: You’re on your own.
More Related Stories
- Must-see morning clip: Barackalypse Now
- Okla. tornado survivor reunited with dog trapped in rubble live on camera
- Is Pope Francis an exorcist?
- Oklahoma tornado death count at least 91
- Frantic parents search for children in tornado's wake
- Crews dig through rubble after deadly tornado
- 51 killed in massive Oklahoma tornado
- Don't cry climate-change wolf
- Record tornado devastates Oklahoma
- Limbaugh: No one willing to impeach the first black president
- Tornado reduces Oklahoma City suburb to rubble
- AP: Toll at least 37 dead in Okla. tornado
- Entire Midwest on tornado warning
- Oregon senator proposes appeal to Monsanto Protection Act
- Supreme Court to rule on prayer at government meetings
- Beltway scandal machine breaks, knows nothing about America
- Gitmo hunger striker launches Twitter campaign
- "Hero" cop, honored by Obama, accused of double rape
- Father of gay high school student arrested for dating classmate speaks out
- Pentagon adviser pushed Anthrax drug, which his firm produced
- Conservatives A-OK with closeted Boy Scouts
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11