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Thursday, September 8, 2011

The New Normal

Weekly data is out for new unemployment claims. There were 414,000 in the latest week and the prior week's number was revised up by a small amount. The four week average also rose by close to 4000. These are truly poor numbers. They indicate that there is no hidden growth about to pop out in the economy. There is only stagnation. On the other hand, there is no collapse of employment which might indicate that the economy is actually in a recession. The American economy remains at a crossroads; it can recover with accelerating growth or it can sink into the trough of another recession. Today's data is just one more indicator that the course decision has not yet been made.

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