“Am I going to have to start watching the market again?” a friend on Twitter asked me a few minutes ago.
Apparently so. Reports of a recovery appear to have been premature. The stock market is about to drop below 10,000 again.
There is, of course, more to an economy than 30 stock prices. But economies are emotional things. Today’s big drop was spurred by higher-than-expected jobless claims.
“The higher than expected (jobless claims) number indicates we’re probably not in the job creation phase at this point,” an analyst told Reuters. That’s just the thing that makes people put their wallets back in their pocket, and begin to hunker down for another recession.
This Friday, according to a report today, the government will acknowledge that the number of jobs lost during the recession was much worse than previously thought. It will reportedly issue the biggest change in unemployment numbers in 30 years.
We know that unemployment data is a “lagging indicator,” meaning that after a recession ends, it takes awhile before jobs start returning. Some economists have theorized that the recession actually ended last May. Others say it ended in November.
So how long will it take? Maybe longer than most baby boomers (in my case) have got.
During the Depression, the economy started growing in 1933, but unemployment stayed in the 15-percent range until the 1940s, when the economic impact of World War II began to be felt.
The Wall St. rally that started last spring was based on the assumption that the economy was no longer in a free fall. The market is down 4 percent so far in 2010 and some are predicting a full-blown market correction of 10 percent.
An economy needs optimism to recover. There’s little to be found.