The stock market is considered a leading indicator of future economic conditions. My 13-year old son has already figured something out, though. He's realized that most economic forecasts are wrong. I explained to him the old saying from John Kenneth Galbraith that economists forecast only "because they are asked." He also said "We have two classes of forecasters: Those who don't know ... and those who don't know they don't know."

No one ever knows if a forecast he or she is making is going to be right because one can never know what other changes are in store. But one can get a good handle on things on an aggregate level. It's getting things right on an industry level that's hard, and on a company level that's even harder. That's especially true because the most current industry data is usually two months behind, and sometimes even more. The more refined you try to be, the older the data you must work with; that is, if there's any data at all. It's just the nature of data collection and the peculiarities of statistics. Strangely, it's actually easier to make five- and ten-year forecasts than quarter-to-quarter forecasts. (I used to joke that I'd prefer to make long-range forecasts because no one would be around to remember that I had made them.)

With that background in mind, the recent bull moves of the stock markets should make us feel more confident that things will be getting better. A recent Conference Board survey of CEOs seemed quite optimistic as well. Of course, we do have to be skeptical of all forecasts. There is no guarantee that any rise in the market will eventually translate into increased capital spending or increased demand for print. After all, the recent change in the tax law did not repeal the Internet.