Our Economy: What the Hell is Going On?

It seems like the American public has been on a bit of a roller coaster lately when it comes to economic projections.

The week before last, after the overall jobless rate dropped slightly, the President said “the worst may be behind us” and “we are pointed in the right direction.” We also just heard that European countries’ economies are growing again, marking the official end of their recessions.

Good news, right?

Then last week we learned that retail sales in the U.S. dropped slightly in July, despite the fact that Cash for Clunkers fueled new car purchases. And we also learned that consumer confidence is down.

Uh, oh.

But today we hear that for the fourth month in a row a leading U.S. economic indicator has risen, leading to speculation that the worst is behind us.

Great!

But we also found out that the number of first-time jobless claims rose AGAIN last week, “surprising economists,” and not in a good way.

Oh, sh…

Is your head spinning? Just when we start to feel like this economic mess may be coming to an end, we hear stuff that makes us feel ... a teensy bit unsettled.

It’s confusing, so I decided to IM (even though he sits 20 feet away) a colleague at TheStreet.com for some help understanding.

Gregg Greenberg, a.k.a. Five Gs, writes the ridiculously popular column “5 Dumbest Things on Wall Street” and thinks about this kind of stuff a lot ... so we asked him if he could dumb it down for us a little:

Mike: Gregg, can you please explain to me what the hell is going on with our economy? It seems so hot and cold lately. Talk to me like I’m an idiot (which I’ve been told isn’t far from the truth).

Gregg: You are far from an idiot Mike. Most folks don’t know what is going on. All they know is that their house is worth far less than it was not too long ago and their job is a whole lot less secure.  Even after the recovery in the stock market from the March lows, there is a general pervasive feeling like that Talking Heads video where David Byrne goes “How did I get here?” and starts whacking himself in the head.