There has been quite a few disappointing US economic data point recently - consumer confidence is down and the total amount of job creation in the private sector is disappointing relative to economist's models. This type of data leads a lot of people to talk about a double dip recession. While this is possible, it may be that this is merely the impact you get when part of the country is hit by an environmental disaster - the job growth is a little more anemic and consumer confidence goes down. On June 9th, the Atlanta Fed had this to say:
Since regional labor data lags by a few months, the next Beige book, released on July 28th, might help clear things up a little more. There is no question that the public at large is over estimating the spill's economic impact and it is also true that the US has some long term structural economic problems that have yet to be resolved, but it would be interesting if the financial markets are over extrapolating by looking at the temporary deviations caused by this disaster and assuming that they are a sign of a systematic problem.
On balance, Sixth District business conditions appear to have improved modestly in April and May. ....However, the recent Gulf oil spill and the floods in Tennessee have tempered the outlook in those areas. Contacts indicated that the potential impact on the tourism industry along the coastline of Louisiana, Mississippi, Alabama and western Florida could be substantial. In some cases, vacation lodging cancellations have been replaced by bookings from clean-up crews, laborers, and the National Guard. The Nashville area is expected to see a decline in tourism-related receipts because of damage to several tourist venues there. The near-term outlook among hospitality contacts varied greatly, reflecting the high level of uncertainty.
Since regional labor data lags by a few months, the next Beige book, released on July 28th, might help clear things up a little more. There is no question that the public at large is over estimating the spill's economic impact and it is also true that the US has some long term structural economic problems that have yet to be resolved, but it would be interesting if the financial markets are over extrapolating by looking at the temporary deviations caused by this disaster and assuming that they are a sign of a systematic problem.