Another View of the Data

While I applaud the cautious optimism of Spencer and Tom, I’m more inclined to quote Joseph Brusuelas:

[T]he January payrolls added a dollop of Zen like logic to a recovery that is shaping up like no other. An additional 111,000 workers entered the labor force, yet the unemployment rate fell to 9.7% while private sector employment continued to contract. Hours worked, demand for temporary workers and the hiring in the service sector all improved. However, without the benchmark revisions, the unemployment rate would have increased to 10.6% which better captures the condition of an economy that has seen 8.4 million workers displaced during the recession.

The bump in manufacturing was more than balanced by the drop in the Service Sector, as more and more flower shops cut staff in the face of slack demand and unavailable credit.

If the bank bailout was to bailout the banks—defibrillating them to kick-start the economy’s heart, as it were—then it appears to be time to admit that that program was too small. Or to stop the other programs that are making it more advantageous for banks to hold funds than lend them. Any way you look at it, the optimistic view that declining unemployment has started doesn’t appear to be the way to bet.