There was much celebration in the political class and elsewhere over the latest batch of unemployment figures. But as I watched the debate over the falling unemployment rate versus the shrinking labor force, I was reminded of a line from the Quentin Tarantino movie Pulp Fiction.
In the movie, Harvey Keitel (Winston Wolfe) is helping gangsters John Travolta (Vincent) and Samuel L. Jackson (Jules) out of a jam. At one point, when the situation is looking up, but not quite resolved, Keitel cautions the gangsters against celebrating prematurely with a choice but obscene metaphor.
I believe we are at that point with the economy: everyone wants to celebrate our being out of the woods, but there are signs that we are still far from okay.
Walter Russell Mead notes that gasoline consumption has fallen. Mead is referring to this graph from the Energy Information Administration, which some analysts believe foretells another recession.
Businessman Martin Taylor has an opinion piece in the Financial Times (registration required) headlined, "False dawns and public fury: the 1930s are not so far away." Taylor argues,
"Forget the icy weather: the financial markets are signalling that spring is coming. Equities are rallying and credit spreads have narrowed. Yet look around, if you can bear to. Similarities with the interwar period–a time of persistent false dawns–are multiplying ominously."
Even the New York Times is searching for, but not really finding, any signs of recovery.
For now, I will be keeping the Champagne on ice.
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