The recent weak jobs report should serve as a wake-up call to economic reality. The news that payrolls expanded by only a meager 120,000 in March was disappointing, but far from momentous. But it should remind investors and business people that earlier signs of strength overstated the economic fundamentals and that the recovery, though reasonably secure, was plodding along and will likely continue to do so.
Economic statistics seem at times to have their own ebb and flow, sometimes overstating and sometimes understating the underlying fundamentals. Sadly, these often meaningless data variations can create false feelings about economic possibilities: enthusiasm when the statistical flow leans toward the strong side or despair when it leans to the soft side. Investors in particular succumb to such swings in attitude, but to a lesser extent, so do business people. So it was with the string of unsustainably good numbers late in 2011 and earlier this year.