Just when you thought the mess from the February snowstorms was over, it has started to obscure a clear understanding of how the economy is doing.
There has been a string of disappointing data in the last two weeks, including rising numbers of unemployment claims and hints of a new dip in the housing market. A report on the jobs market in February, due Friday, would normally help provide clarity on whether the economic recovery remains on track -- but not this month, as forecasters expect a large but uncertain loss of jobs because of the February snowstorms.
The resulting muddle has left economists struggling to parse the true underlying trend of growth -- a problem underscored by three reports released Wednesday.
The Institute for Supply Management's index of activity at non-manufacturing businesses rose sharply, to 53 points from 50.5. Numbers above 50 indicate that activity at service businesses, such as hotels, hospitals and law firms, is rising.
And a report on the job market by ADP, the payroll processing company, found that private payrolls declined by 20,000 in February. That suggests that while the job market remains weak, it is not falling off a cliff.
The conflicting signals are reflected in the Federal Reserve's "beige book," a compilation of anecdotal information from businesses around the country prepared by the Federal Reserve, also released Wednesday.
Source: Washington Post | Neil Irwin
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