breathe!

National Journal: Breathe, everybody.

Wednesday’s stock market dive is probably an overreaction to an admittedly ugly week of economic data – in the same way that market exuberance in recent months was probably an overreaction to the best job-creation streak the United States has seen in years.

…At this point, we’re one bad Labor Department release on Friday away from some genuine panic about the state of the recovery….

Reality is a little more positive and a lot more complicated than that. Wall Street analysts are fairly united in their view that the recovery has entered a “soft patch,” just like it did last year, and that sooner or later, growth and job-creation are on track to pick up again. Several analysts and columnists have been reminding Americans that recoveries from financial crises can often feel like stop-and-go traffic on the freeway.

…Lawmakers can help “by not adding more problems to the mix,” said Nigel Gault, chief U.S. economist for IHS Global Insight. “The best thing that they can do is to raise the debt ceiling, thereby removing one potential source of disruption. And they should not try to impose immediate budget austerity on a weak economy.”

Gault, and several other top analysts, expect growth to accelerate in the third quarter. Until then, try not to panic – or get your hopes up too far.

Full article here