THE BLOG
03/18/2010 05:12 am ET | Updated May 25, 2011

Not a Positive Economic Picture

For months now, there's been considerable debate about whether the U.S. economy is on the road to recovery.

Bulls point to the massive monetary and fiscal stimulus that's been pumped into the economy, the sharp rebound in share prices, and the relative improvement in certain indicators as a reason for optimism.

Bears -- like me -- note the persistent negative sentiment on Main Street and in many corporate boardrooms, the steady increase in foreclosures, personal bankruptcies, and the ranks of the long-term unemployed, and the numerous imbalances -- including still-very-high levels of public and private debt -- that remain unresolved.

So who's right?

Chances are that we won't know the right answer for some time. Historically, sustained economic recoveries have not been fully recognized until well after the fact.

But one way to get a sense of where things stand is to look at how things are playing out relative to the past. On that basis, the notion that the economy is back on track leaves a lot to be desired.

To cite one example, Calculated Risk regularly updates and publishes a chart, "Percent Job Losses in Post WWII Recessions," which reveals that the current pace of job losses is more severe and persistent than during all prior postwar downturns.

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Another chart featured in a recent report by the Rockefeller Institute of Government, "Recession or No Recession, State Tax Revenues Remain Negative," (hat tip to The Business Insider) paints a similarly disturbing picture of the recent trend of real -- inflation-adjusted -- retail sales.

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In fact, using data from Bloomberg, I put together several graphs that show how key economic indicators -- including new home starts, industrial production, durable goods orders, and consumer credit outstanding -- have fared during every downturn -- including the present one -- since April 1960.

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As you can see, the pattern in each chart resembles the one apparent in the earlier examples: things are generally worse now than they were at the same point during prior episodes.

Interestingly, when you compare the current trend of the stock market -- an indicator that many bulls have been fixated on -- to those that unfolded during past recessions, it has also come up short, despite the near-70 percent rally we've seen in the S&P 500 index since the March 2009 lows.

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Of course, there's more to reading the economic tea leaves than charts alone.

Or so many of the bulls seem to think.