Without diving too deep into the figures (the primary sources are readily available), it looks like those of us who attributed much of the first quarter’s economic weakness to weather (first the severe winter in the Northeast and Midwest, then to a lesser degree the flooding in the Southwest) were on track. Employment, consumer spending, and construction all looked more positive in the early 2nd quarter – at least more positive than the talking heads would have you believe a month or two ago. With no real reason for a pullback earlier in the year other than severe weather, it looks like analysts who tried to downplay that factor were either overthinking it or had ulterior motives.

The employment landscape provides a good example of how no economic measure is a pure indicator or predictor of economic health. For example, it is frequently overlooked that one of the drivers of unemployment has been layoffs in local, state, and federal government. Local and state layoffs are more or less a result of weaker tax revenues, while federal layoffs are largely due to sequestration and other budget cuts. Large numbers of these jobs can be added or subtracted with the stroke of a pen. Second, America is in the midst of a demographic shift that has been a known factor for decades. Baby boomers are impacting employment as they retire and/or transition into part-time employment. Unemployment would have ticked up to an extent with or without the Great Recession solely due to demographics. Finally, the mining and natural resource sectors have been depressed in recent quarters due largely to the low price of oil and refined products. These jobs are ready to come back online when the price of oil heads back up. 

The lesson here is if you hear excessive optimism or pessimism from the 24-hour news cycle, take it with a grain of salt and do your own research using primary sources.