Economic news has something for everyone

So, comedians of yore would say when setting up a classic joke, I’ve got some good news and some bad news. In general, the joke would hinge on the defiance of one’s expectations, with the good news obviously not so great, and vice versa.

Folks tuned into the economy might have felt that they were hearing one of those bits recently when they got some mostly good news one day, and then had it followed by apparently bad news that was actually part of the design. Economics, like some good comedy, isn’t always straightforward.

The optimists seemed to be in the driver’s seat with a report on fourth-quarter growth that was fairly strong by any measure. And then, just a day later came news on consumer spending, which had fallen. Not dramatically, but enough to raise a warning flag.

So, where do things stand, exactly? One perfectly reasonable answer: Depends on what you’d like to see.

The dip in consumer spending has at least in part come about because of the Federal Reserve’s continued run of increases in interest rates. Our nation’s central bankers, looking to tamp down out-of-control inflation, sought to slow the economy. Looked at in that light, reduced consumer spending is good news perhaps dressed up as bad news.

The report on fourth-quarter growth might seem more clear cut. At least that’s how the White House sought to spin it. The economy grew at an annualized rate of 2.9%. This surely was good news, perhaps with some underlying worries about what may lie ahead.

There are signals that the economy overall is not exactly as robust as one might hope. It’s simply not easy to know for certain.

Are we headed for a recession? Could be. Some evidence would even suggest that it’s more likely than not. But it’s not at all a certainty, and if we find ourselves in one, it could be over before most even know it’s upon us.

With the Fed boosting rates by a quarter-point after its meeting Wednesday, what will matter most is what chairman Jay Powell has to say about what’s likely ahead. More rate hikes, probably, but, one wishes, not many more. And perhaps not to a point as high as what had recently been thought.

Now that would be some truly good news.