The daily flow of economic data offers little insight into the direction of the economy. Most government statistics are preliminary releases, destined to be revised in coming months so are certain to provide a poor picture even to someone with clear context on their meaning. The stock markets are worse. Trying to predict the turns of the economy through stock prices is like trying to assess climate change with your head in a freezer or hot oven. Still, we cannot escape these easy stories, and so it might be helpful to place some of the reporting of data into context. I begin with Wall Street.

Those of us with hopes of retirement welcome the soaring numbers on Wall Street. The growth in stock prices and post-recession highs has unleashed whispers of a coming wave of prosperity. Of course, few commentators have bothered to look at economic fundamentals. With the Federal Reserve continuing its quantitative easing, inflation-adjusted bond yields are now below zero. Of course, the goal of QE3 is to make financial investments less attractive than buying new plant and equipment and hiring workers. While QE3 has not yet unleashed new business investment, it has made stocks look good, and so prices rise. This suggests the many desperate efforts to re-inflate the bubble may be taking hold.

The employment situation was likewise received with glee. Though news of 236,000 new jobs is better than in recent months, a deeper peek into the numbers yields little good news. There are currently 12 million Americans unemployed and looking for a job, a further 2.5 million marginally attached to the labor force and almost 8 million more who cannot find full-time work. Over the past year alone, nearly a million workers have left the labor force. This is far more than retirement would suggest. We should be seeing a steady growth of workers, some 150,000 per month, as young people age into labor markets and older ones retire. Instead, that growth has been under 60,000 per month over the past year. In February alone, more than 280,000 workers who should have been in the labor pool evaporated, while some 236,000 found jobs. Of those new jobs 444,000 were part time. Yes, you read correctly, according to the Department of Labor, full-time employment dropped by more than 200,000 jobs last month.

The same report showed a small increase in the work week and wage growth of 4 cents per hour. This translates into an annual decline in wages when corrected for inflation.

Despite the delight in the media, the February data tell a wretched story. Wages decline, labor force declines and, at the current rate of job growth, we shall reach full employment sometime early in the next decade. At some point, this economic mirage will be revealed as dry and empty, no matter how pretty a picture the media paints. This is known in the White House, where blame, rightly or wrongly, is sure to be fixed.