Ian Shepherdson Improvement Quotations

With three sub-300,000 numbers in the past four weeks, it is beginning to look as though there has been some real improvement in the labor markets this year.

It is beginning to look as though there has been a real improvement in the labor market at the start of this year.

With the fastest productivity growth and biggest drop in unit labor costs in seven years, the numbers are certainly worth shouting about, but as yet we are far from convinced that much of the improvement is structural. Mr. Greenspan is of the same view, which is why rates are going up no matter what happens to productivity growth.

As far as we can tell, confidence now seems to have run a bit ahead of the improvement in the stock market, and the failure of the Nasdaq and Dow to make further progress in recent weeks makes it doubtful that confidence will continue to rise at the May pace. The sharp rise in unemployment is likely to become a negative factor, too.

The Fed's Beige Book acknowledges some of the improvement evident in recent economic data, but the tone of the survey could not yet be described as a ringing endorsement of the recovery story,

The improvement in the stock market is allowing the hugely favorable monetary and fiscal environment to do its work -- just as it was in the spring before the stock market melted down,