Slow progress

Economic Spot-check: If GDP growth numbers were the only standard, the recession would be over in almost all every country. But after a steep recession, economies can’t be considered healthy until consumers and companies are feeling confident about spending and investing.

The Breakingviews.com Economic Spot-check (BES) suggests that moment hasn’t yet arrived. It rose from 2.6 to 2.7 last week. That’s back to the high for the half-year old series, but still stuck between Slow Decline and Stability.

For consumers, one problem is unemployment — the US rate reached 10.2 per cent last month. The other is credit, which is still hard to get. The result: they seem to be trading down in their purchases, to judge from relatively weak sales at basic goods producers such as Kraft Foods and Molson Coors Brewers. Companies are responding by cutting costs — that’s good for profits but bad for jobs.

The BES is almost stagnant, but a similar index for the financial sector would look much healthier. On Wall Street, cash bonuses are expected to be up 40 per cent this year.