Clouded By Knee-Jerk RelativismMichael Panznerupdated Apr 18, 2012TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity. Although relative comparisons are quite useful, the absolute numbers matter, too. In my experience, Wall Street "analysts" tends to give short shrift to the latter. That's why, for example, they can argue (with a straight face, no less) that stocks are cheap vs. bonds -- without making reference to the fact that bond yields are at artificially-depressed extremes as a result of unprecedented Federal Reserve assistance. In "Don’t Be Fooled by These 10 Misleading Economic Indicators," The Philly Post's Gene Marks highlights a number of instances where knee-jerk relativism has clouded the bigger picture.What reports like "consumer confidence" and "housing starts" really mean. We all hear plenty of economic data every week. And recently, the news reports have been generally positive. Increased retail sales. Decreasing unemployment. A higher stock market. But it’s all relative. Sure, we’ve been seeing better numbers lately. But compared to what? The recession? A lot of the economic news is more than a little misleading. Let me give just a few examples, using data and charts from the very excellent Calculated Risk blog written by Bill McBride. 1. Gross Domestic Product Gross Domestic Product, or GDP, is a measure of a country’s industrial output. During the recession, the U.S. had a negative GDP. So people are high-fiving because the Fed is predicting growth of 2 to 2.3 percent this year, which is up from the 1.7 percent growth recorded in 2011. This is not something to cheer about. China’s economic growth has slipped to (gasp!) only 8 percent! India is growing at a 7 percent rate. Even Sweden—Sweden, for God’s sake—is predicted to grow at more than 3 percent next year. How bad are we doing? If our economy’s projected growth rate doubles to 4 percent it would still be 30 percent behind its growth rate from before the recession, and half of what it was back in the ’80s. 2. Housing Starts and 3. Home Sales Did you know that housing starts are about to cap their best quarter since 2008? Whoopee! But hold on a sec … let’s look a little closer. Yes, the real estate and construction industries are slowly starting to recover. But for small businesses in those places you’ve got a long, long way to go. For example, that fantastic housing starts number? It’s still at one-third the level of housing starts back in the mid-2000’s. Yes, you read right: one-third. New home sales are hovering around 300,000 per month compared to 1.4 million (yes, million) back in the mid 2000’s. And today’s existing home sales are about 35 percent less than they were back at the same time. 4. Unemployment Rate and 5. Weekly Unemployment Claims People were slightly concerned the other week when it was announced that the unemployment rate only fell to 8.2 percent. We should be very concerned. Ask any economist, and they’ll tell you that a “natural” rate of unemployment (where the supply of labor is near where the demand of labor is) should be about 6 percent. That’s because there will always be a percentage of people unemployed—seasonal employees, etc. Today, our unemployment rate is much higher than it should be. We still have more than five million people less employed than before the recession started. In early April, everyone was excited because weekly unemployment claims were at 375,000 … a four-year low. That’s really nothing to cheer. Before the recession, weekly unemployment claims were consistently below 300,000. Last month, the economy added 120,000 net new jobs. At that rate, it would take 42 months to get back to the level we were at before the recession. That’s three-and-a-half years! Click here to read the rest. Editorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.