IS IT "THE 401K STATEMENTS, SILLY" NOW?

Jobless but Not Hopeless: A look at certain economic indicators shows significant declines in the rate of job losses--and positive signs of new hiring in growing industries. (ROBERT C. POZEN, 7/08/03, NY Times)

In short, when the Federal Reserve Board talked in late June about "labor and product markets that are stabilizing," it was making an important point--in its characteristically obscure and understated manner. The rates of change in recent Labor Department surveys, reinforced by the optimism in the recent set of chief executive surveys, strongly suggest that the job market is about to turn the corner. The trend in these surveys may mean an end to the "jobless" recovery as more Americans find work outside manufacturing--in areas like education, health care and credit services.

This is even more speculative and likely ludicrous than the usual fare here, but I wonder if the value of our 401k's hasn't become more important to us psychologically--and that's all that really matters in a slowdown like this one--than the jobless rate. If you were George W. Bush and you had a choice on Election Day of either a 6% unemployment rate with the Dow over 11,000 or a 4.5% rate and the Dow still around 9,000, wouldn't you be inclined to the former?

Of course, if you can get >11,000 and <5% you're going to win in a walkover... Posted by Orrin Judd at July 9, 2003 8:05 AM