The first rule of understanding what's happening in the economy should probably be that all economic reporting, and corporate reporting, is always about “what have you done for me lately.” Lately, those reports are not pretty, and not enough time is being spent discussing what's really wrong: inflation.

The internals of the unemployment report look dire, the way many of us look when we get out of bed in the morning. The payroll report for February went down by -63,000 workers, December's +82,000 reading was cut in half to +41,000, and January's -17,000 was revised down to -22,000. The net three-month figure is -44,000. In all of the banter among the talking heads on financial television and in the online reports, there is nary a mention about how payroll data lag the economy. The payroll data are bad now because things slowed down more than a quarter ago.

The household survey is a better indicator of the current state of the economy. That peaked in November 2007, at a record employment of 146,647,000. It has dropped to 145,993,000, a -267,000 decrease, or a -0.18% change. Even in the short term, the reporters are making way too much out of the employment reports.