The recent weak jobs report should serve as a wake-up callto economic reality. The news that payrolls expanded by only ameager 120,000 in March was disappointing, but far from momentous.But it should remind investors and business people that earliersigns of strength overstated the economic fundamentals and that therecovery, though reasonably secure, was plodding along and willlikely continue to do so.

Economic statistics seem at times to have their own ebb andflow, sometimes overstating and sometimes understating theunderlying fundamentals. Sadly, these often meaningless datavariations can create false feelings about economic possibilities:enthusiasm when the statistical flow leans toward the strong sideor despair when it leans to the soft side. Investors in particularsuccumb to such swings in attitude, but to a lesser extent, so dobusiness people. So it was with the string of unsustainably goodnumbers late in 2011 and earlier this year.

Unseasonably mild winter weather created a particularlypronounced distortion in the beleaguered housing sector. Sales ofnew and existing homes through February indicated growth of 11.4%and 8.8%, respectively, over the same period in 2011. New homeconstruction showed a gain of almost 35% over a year ago. Thoughthe numbers were welcome signs that the worst of the housing slidehad passed, the degree of strength was suspect. After all, creditstandards at banks remained tight, as they still do, and lendingfor real estate continued to decline. The housing market stillshowed an inventory overhang of unsold properties, both in theofficial statistics and in foreclosures not yet executed. Thedecline in housing prices, by 4%-plus from the comparable period in2011 according to the Case-Shiller Home Price Indices, alsosuggested something less robust than the sales and buildingstatistics implied. The full array of available information wassufficient to conclude stability but little more.