“Flat on its back” -- that's still the condition of the U.S. economy, according to a recent description in The Elliott Wave Financial Forecast. But that’s not what the media is saying. So which is true?
The primary focus in the media about "economic recovery" includes only the recent numbers. How maybe this month is better last month, or vice versa. If you read some news stories closely they do manage to get some of the facts right. This past November, for example, was a better month for people in search of jobs, when thirty six states said unemployment was down. But then came December, when forty-three states said that unemployment rose. And during the past three months -- January through March -- unemployment has been stuck at 9.7%.
Those are the recent facts. The problem is, there's too few of those facts to reflect the unemployment trend. Years of experience prove that one or two months of data is not is not enough -- three months of unchanged data is no better.
Some economic measures have recently turned positive (GDP) or at least slowed the rate of decline (hourly earnings). When the stock market is in a rally, even news that's "less bad" is cast in a "good" light. But a candid look at the broad economy still shows that less bad can only go so far. Total construction spending continued to fall in each of the past four months, and in 21 of the past 25 months (Briefing.com). Can an economy recover and grow with almost no private sector construction?
When the stock market has enjoyed an authentic rally, the last thing people want to hear is that tough times aren’t over yet. This is why so many commentators insist that the economy is also climbing out of its hole. Hope may be the one thing that people can hold on to… but false hope does more harm than good.
We are still in a bear market. Those who say otherwise would do well to remember what happened in 2007, before the downward trend began. In its first issue of that year, Newsweek magazine published a story from a Yale economist with the headline, "Let The Good Times Roll." But The Elliott Wave Financial Forecast's first issue of 2007 included a Special Section with the headline, "2007: The Year of the Financial Flameout." Newsweek’s cover story last week said, "America’s Back." Once again, we believe the evidence shows something very different.
It's never wise to believe the first thing you see or hear in the news without looking at the evidence or bothering to ask questions. Questions are good-- a means to an end, the way to get to the bottom of things. Assumptions lead to disappointment, whereas a few smart questions can make the trends and patterns can become clear.