The lead article in the Washington Post warns that Europe may lag the U.S. in recovery. The article correctly notes the weakness of the response of the European Central Bank to the crisis relative to the Fed's aggressive response. It also points out the limited fiscal stimulus from EU governments, with Ireland actually being forced to raise taxes and cut spending (kind of like California). While many of the factors that the Post cites raise real questions about the likely strength of the EU economy, the paper also includes the bizarre assertion that "the pace of job losses has eased ."The Post must have some secret data source on the U.S. labor market since this is not what the government data show. The four week average for initial unemployment claims is almost 630,000. While this is down slightly from a March peak of over 650,000, it is still well above the pace of new claims in the late fall and beginning of this year, months in which job losses averaged close to 680,000. The April jobs data did show a somewhat slower rate of job loss than in the prior five months. However, the loss of 611,000 private sector jobs was larger than the average job loss initially reported for the prior five months. In short, there is not much evidence that the rate of job loss is easing thus far.
--Dean Baker
