Anthony Hall
Stop the presses! Professor Peter Morici, who might be described as a brilliant scold, warned this week that the U.S. economy might be getting healthier.
Morici, former chief economist at the U.S. International Trade Commission, now a professor at the University of Maryland, has sliced and diced U.S. economic policy in a series of clear, but caustic editorials for as long as memory permits. He says one thing brilliantly: Solve the problem. (He seems to hate it when policymakers don't tackle the problem at hand, aiming instead for placating headlines. That just seems to drive him crazy.)
He is facile, succinct, taut with words. Still, it is hard to recall an editorial coming from his desk that is quite as terse as the 108 words penned this week that warned, "Things appear to be getting better."
The body blows to pessimism, Mr. Morici said, were provided by "stronger retail sales ... in January, continued progress in manufacturing output and stronger housing starts."
Then the uppercut: Initial unemployment benefit claims dropped to 348,000 for the week ending Saturday, "the second lowest level since 2008."
"Don't break out the champagne yet but put a few bottles on ice. It may be a very bright spring," Morici wrote.
The challenge, of course, is to explain why that is -- perhaps the reason for Morici's brevity.
All things being equal, we aren't due for a recovery for a year or three.
The clearest evidence that caution is required is that intention to hire is climbing among U.S. firms, but so are announced layoffs. In January, Challenger, Gray & Christmas said firms announced a reduction of 53,486 jobs, a 28 percent increase over layoffs announced in December and 39 percent higher than January 2011.
Clearly, larger companies are still in the doldrums. Month after month, Automatic Data Processing Inc. reports smaller firms adding the lion's share of jobs. In January, 167,000 jobs added to the economy involved companies with fewer than 500 workers while firms larger than that added a grand total of 3,000.
That's every firm on the Dow Jones industrial average plus perhaps 2,750 more that are still treading water. There are still 12.8 million listed as unemployed and 11 million listed as marginally attached to the workforce or working part-time for economic reasons.
No editorializing needed there. Still, it's good to see Morici in a better mood.
In international markets Friday the Nikkei 225 index in Japan added 1.58 percent and the Shanghai composite index in China was flat, up 0.01 percent. The Hang Seng index in Hong Kong gained 1.01 percent and the Sensex in India rose 0.75 percent.
The S&P/ASX 200 in Australia climbed 0.33 percent.
In midday trading in Europe, the FTSE 100 index in Britain added 0.46 percent while the DAX 30 in Germany gained 1.34 percent. The CAC 40 in France rose 1.38 percent and the Stoxx Europe 600 rose 0.62 percent.
