The first marvel he quotes is the April rise in housing starts to “an annualized rate of 717,000 units.” He doesn’t want to tell us that the number is a mere 59,750 per month because we deal in big numbers these days. We used to cite government budgets in annual figures, but now politicians tell us how much they are going to save us per decade rather than per year; it’s much more impressive.
He goes on to say that because of this increase, “now one can make a case that a sustained rise is in place.” One could make that case, but no one in any of the articles I have read has done so. What they have pointed out is that even with the increase the building rate is still below half of what is needed for the industry to be considered healthy. To his credit, I guess, he doesn’t say that he is making that case, merely that one could do so.
He then gushes happily that industrial production rose by 1.1% in April, but disregards as irrelevant that it fell in both February and March. He seems to think that winning one out of three constitutes a “winning streak,” which would qualify him to do PR work for the San Diego Padres.
My favorite is this little piece of delusional thinking,
Gas prices on Wednesday were 18 cents a gallon lower than a month ago. It might not be appropriate to be too ecstatic over this news, since one of the factors depressing world oil prices is the prospect that Europe’s economic woes will depend and China’s economic growth slow further. But the threat of higher gas prices had promised to act as a serious headwind to the U.S. recovery, and for now, we can scratch that worry off the list.
Seriously. Europe and China are both going to a recession but that’s good news for us because it means low oil prices, so high oil prices won’t slow our recovery. Does he really believe that recession in both Europe and China will not slow our recovery, irrespective of oil prices?
Needless to say, he did not discuss the jobs picture, because to the punditry the jobs market has nothing to do with recovery. We still are not creating new jobs fast enough to keep up with the increase in the work force caused by population growth, and the nominal unemployment rate is dropping only because people are giving up and ceasing to look for work.
Of course this piece about the rosy state of the economy is accompanied by a picture of President Obama, beaming happily at the camera.
Update, 11:30am: h/t The Market Ticker
The Philadelphia Fed is definitely not on board with Mr. Leonard. Among other things, it's May report (pdf) says regarding manufacturing in May that, "The index for new orders fell four points, from 2.7 to ‐1.2, its first negative reading in eight months."