The reason for this thread, is that I really don't know the answer. I hear to many conflicting reports.
being a guy in the financial markets sector, managing people's wealth and keeping a finger on this kind of stuff, I see where you're coming from. I call it financial pornography.
But there are some pretty good guideposts available out there that usually correlate to the overall health of the economy, some visible, some not so visible, some sexy and make it on CNBC, some boring yet important, but ignored nonetheless because they don't produce press. Whaddaya gone do?
As to the reports you linked...
Yes, jobs are up, but you have to weigh the types of jobs lost like manufacturing to the ones gained. If you loose good paying jobs and replace them with low paying non career type jobs, then it doesn't matter how many new jobs are created.
As far as unemployment statistics. I would love to know how many people are truly unemployed.
Tim, this is an incredibly astute observation as to why employment information is THE PRIME example of financial porn. In this case, there are so many metrics to digest and so many places to get it from, that it is virtually impossible to ascertain what the REAL number of people unwillingly sitting on their duff is. One can look at the same data set and confirm or deny that the economy is rolling, in a state of flux or headed in the tank. Just depends on what you want to say. I focus on the most objective averages I can and what they are doing in conjunction with some other leading indicators. But rarely do I give employment numbers a lot of credence.
I think corporate earnings and GDP are the best and most empirical leading indicators, but there are others, too - spending (personal, corporate and government), housing stats (to a certain degree, but too much of late), CPI, PPI, manufacturing inventories. And the numbers themselves are not as important as to how they weave together, and that is not as important as to what trends are developing. Focus on the averages is what I always tell my clients, and that helps even out the amplitude of the daily, weekly and quarterly news.
I think the current corporate EPS cavitation is a one-quarter phenomena, and will be followed by robust 4Q EPS. GDP in 3Q was a major surprise, up 3.9% versus consensus of 3.1%. Most of that was driven by spending growth (personal - 2.11% thank the heavens for the American Consumer, corporate - 0.82%, gov't - 0.73%), exports grew at 0.93%. The housing element of the GDP made a 1.05% drag. :cool
What's interesting is that the growth in exports almost anulled housing, but did you know that? Of course not!!! Growth in exports doesn't sell, but a housing bubble does. So what happens? Export numbers make it into File 13, and everyone is up in arms about The Great Housing Crash of 2007 and how it's going to plunge the United States into the next Depression. Horsehockey.
Overall, the economy and the "stock markets" as a whole are on solid ground, and annual growth for the economy should proceed at a 2.5-3.5% clip for the next 2-4 years.
