By SBE Council at 21 February, 2013, 12:56 pm
We seem to have gone through the same pattern in each of the past four years. Namely, the New Year arrives, and happy talk seems to ensue regarding the economy in the media and among assorted experts.
But in 2010, 2011, and 2012, the happy talk gave way to sobriety, as various numbers made clear that the poor recovery that began in mid-2009 continued to fail to reach anything close to where it should be.
The happy talk emerged once more this year. But various numbers once again raise doubts about this recovery accelerating significantly in 2013.
For example, the Federal Reserve’s report on February 15 that industrial production, including the manufacturing index, declined in January was not good news.
And on February 21, the Department of Labor reported: “In the week ending February 16, the advance figure for seasonally adjusted initial claims was 362,000, an increase of 20,000 from the previous week’s revised figure of 342,000. The 4-week moving average was 360,750, an increase of 8,000 from the previous week’s revised average of 352,750.”
It’s worth noting that a move in a positive direction in mid-January – dipping to 330,000 during the week ending January 19 – initial jobless claims have since climbed higher. Initial claims running in the 360,000 neighborhood remains far above levels that align with strong growth (for example, in the high 200,000s to just above 300,000).
The economy continues to meander far below where it should be during a recovery. That really should not surprise anyone especially this year given the significant round of tax increases that kicked off 2013.
Raymond J. Keating, Chief Economist