Economy is in the eye of the policy beholder

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No such collapse occurred. Pro-European Union forces triumphed in the Greek elections, and the event passed quietly. But the damage was already done in the manufacturing sector, where factories slashed new orders at a precipitous rate rarely seen in the past 30 years, Mr. Carson said.

“U.S. companies feared potential fallout from the unfolding crisis in Europe,” he said, adding that such attempts by corporations to anticipate bad news rather than reacting to it afterward like they did in the past account for much of the recent economic volatility.

Mr. Carson found proof that the big drop in orders in the manufacturing report was only precautionary and did not signal a slip into recession, oddly enough, in the jobs report.

In the past, manufacturers in a real crisis would have slashed jobs as well as orders, he said, but they did not do so last month. In fact, the jobs report showed they added 11,000 workers in June despite their misgivings about what might happen in Europe.

It all adds up to a big pause in the expansion, with activity likely to resume at more normal levels later this summer, according to the AllianceBernstein analysis. Businesses will see that they were overly cautious.

“U.S. firms will probably take their cue from how their end customers respond,” and reports show that consumers never stopped spending, Mr. Carson said. In fact, a report last week on U.S. car sales in June was outright robust, showing sales increased to a rate of nearly 14 million a year. Other reports on consumer spending have shown mixed results.

“Demand did not collapse, which should offer some comfort to U.S. companies,” Mr. Carson said.

Mr. Carson’s analysis shows how an insightful reading of the dozens of economic reports released each month can be complex, circuitous and hard to understand if one is a lay person or part of the echo chamber of Washington officials who wait breathlessly for the job news each month.

Some economists have become fed up with the parade of politicians who claim the jobs report backs their ideological views within minutes of its release each month, and the bizarre machinations of economists trying to find a way to reconcile the many conflicting signals sent out by the economy.

Dan Croushore, chairman of economics at the University of Richmond and a former economist at the Federal Reserve, advised people to ignore the highly publicized jobs reports and the marked slowdown in employment they displayed.

He said the big fluctuations in employment with jobs growing by an average 226,000 a month in the first quarter and then dropping to 75,000 a month in the second quarter likely will disappear when the Labor Department gets better data and revises the reports in future months.

Mr. Croushore detects a quirky seasonal pattern that has emerged in the past three years, when employment appeared to surge during the winter to great accolades, but then receded during the spring to alarm and disappointment.

It’s normal to become concerned about such a drop in job growth, he said, but “the fact is these data may not be an accurate representation of what is really going on in the economy because the seasonal pattern of employment may have shifted.”

When the department revises the reports, Mr. Croushore said, “the overall patterns will look smoother and of less concern.” A better measure of how the economy is doing, he said, is to look at the one-year average of job gains, which, at 148,000 per month, is up 50 percent from last year.

So there it is: In reading just two reports, four different economists have concluded that the economy is accelerating, decelerating and standing still all at the same time.

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