U.S. ECONOMY BOUNCING BACK... OR IT ALREADY DID
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The Dangerfield Economy

The Wall Street Journal
Review and Outlook
April 5, 2004

Friday's report of roaring job numbers for March … was good news that even the chattering classes couldn't deny. Then again, give them a day or two and they'll have us back in Hooverville. Like Rodney Dangerfield, this is the recovery that can't get no respect.

By nearly every objective measure, the U.S. economy is strong ... Just look at the Misery Index … it's indicating that … the U.S. economy is doing very well.

Today's unemployment rate of 5.7% is close to the level Bill Clinton boasted about … in 1996. Meanwhile, inflation has fallen by a full percentage point over the past eight years. … President Bush's policies should be enjoying at least a modicum of respect.

Instead, the media have done a terrific job of convincing everybody that these are the worst of times. A poll … by the American Research Group in mid-March found that 44% of Americans believed that the country was still in a recession. That's … strange when you consider that the last recession ended … in November of 2001, and for the last two quarters of 2003 the U.S. economy grew at an annualized rate of 6.1%, the fastest in 20 years. … the percentage of gloomsters was higher in March, when we now know 308,000 new jobs were being created ...

The angst is also hard to fathom given that Americans are richer than they've ever been before. Household wealth recently hit $44.4 trillion, an all-time high. … [A] record 68.6% of households own their own homes ...

Household income is up 4.1% … Corporate profits … hit a record level in the fourth quarter of last year, and are expected to rise at a more than 15% clip in the first quarter of this year.

So why are Americans feeling so peevish? One … explanation is that globalization has brought on increased job turnover ... The only problem with this theory is that the "churn rate” … has been falling since the middle of 2001.

That leaves the inescapable conclusion that the problem is perception. This pessimism is … fed by Democrats who want to retake the White House. But it's also flogged by a media that can't seem to admit that the real news of the past three years is how well the U.S. economy has weathered the shocks of a huge stock-market blowoff, September 11, business scandals and the long prelude to war in Iraq. …

Still and all, by November the American people will have had ample time to figure out the good news behind this smokescreen of negativity. … (full article / subscription required)