Wesbury and Stein argue that the key pair of statistics to look are the unemployment surveys, specifically the payroll survey (sent to employers) and the household survey (sent to, natch, households):
Rather than dwelling on the bad news coming from the financial and housing sectors, we believe it is important to look at the underlying drivers of the economy. And those look very solid.
Back in 2002-03, the household measure of civilian employment was much stronger than the payroll survey, signaling economic recovery. However, at the time, many prominent economists, including Alan Greenspan, (wrongly) argued that the payroll survey was right about the economy, not the household survey.
Then, in late 2007, the household survey was weaker than payroll growth, signaling slower growth and gaining some adherents now that it was showing weakness. But in the past few months, the household survey – which we have followed closely all along – has turned up strongly. In the first four months of 2008, when the payrolls survey shows a loss of 65,000 jobs per month, the household survey shows a gain of 179,000 per month.
Read more HERE.
Part II: This fortnight’s Forbes magazine includes “Strange Behavior,” which notes that, with oil hitting (as of Monday) $120 a barrel, “there are some things about the energy markets that don’t make much sense. Or maybe they do.”
The first strange thing is that, with gas prices lurching toward $4 a gallon, and with diesel prices over $4 a gallon, the Department of Energy expects that U.S. petroleum demand will drop this year by … less than 1 percent. One reason is that, with manufacturers building better (and more expensive) cars, the average age of a U.S. car was 9.2 years old as of 2006. The story also mentions the inconvenient truth that improvements in car fuel economy have led to more driving. It also notes that fuel is, to probably most people’s surprise, not the top expense of owning a car, even at today’s gas prices.
Read it yourself HERE.
As always, the facts that count are the facts that apply to you personally — how you are doing financially, and how your customers and vendors are doing financially. The mainstream media, being based on the East Coast and having a fascination with the West Coast, tends to inflate what’s happening on the coasts (case in point: The post-Operation Desert Storm recession of the early 1990s, which had essentially zero impact in the Midwest and was over anyway about the time that George Bush was being blamed for it), and tends to ignore what it calls “flyover country” unless a politician is visiting or a disaster occurs. Keep that in mind (and the editors of the local newspapers should keep that in mind) the next time you read another economic doom story on the front page of your local daily newspaper.