Economy Refuses to Tank. Bears Weep

The U.S. employment market lost a better-than-expected 20,000 jobs in April.


To quote bloody-and-beaten-but-still-standing boxer Jake LaMotta (portrayed by Robert De Niro) from the 1980 film Raging Bull, "Is that all you got!" The U.S. economy, supposedly sinking into the worst economic slump in a generation, lost a skimpy 20,000 jobs last month even though some analysts were looking for losses closer to 100,000. As economist Robert Brusca put it this morning: "Job losses are way below the recession norm for this point of business cycle (if this is recession). Many things do not really add up...for the recession forecasters.... Is it still a recession? Was it ever?"

And the unemployment rate actually dipped to 5.0 percent from 5.1 percent in March. So far, the economy has lost jobs for four straight months: down 76,000, 83,000, 81,000 and now 20,000. Back in 2001, the economy lost 30,000, 281,000, 44,000, and 128,000 as the economy weakened. And in 1990, the economy lost 42,000, 280,000, 82,000, and 161,000 as the economy tanked. Way back in 1981, jobs losses were 36,000, 87,000, 100,000, and 209,000.

Now keep in mind that once the unemployment rate looks to have peaked, the Fed will probably move to raise rates. So see how this virtuous circle works for you: Stocks, already up 10 percent since early March, continue to rise and replace the household wealth lost to the housing bust. The dollar continues to strengthen, helping bring down food and energy inflation. That bolsters real incomes and consumer spending. Americans, feeling richer and more confident, finally begin to move back into the housing market. The 25-year boom continues.