Every day, millions of Americans get up, go to work, and move their companies forward. The economy doesn't look great from Main Street, but it's not falling off a cliff, either.
Then there's Wall Street, with its wild gyrations and euro-jitters. And from economists and analysts, too, comes an increasingly negative picture of what's happening in economic activity.
What's going on? There's a disconnect, which at its heart is about reality and expectations.
On Friday, the Department of Labor offered a fresh dose of reality, which was largely positive: The economy added 103,000 jobs last month, far better than the 60,000 jobs that economists expected, on average. The growth in jobs was enough to keep the unemployment rate steady at 9.1 percent.
Not only that, the Labor Department revised upward its estimates of employment growth that occurred in the previous two months: July saw 127,000 net new jobs added (revised from 85,000); August saw 57,000 (revised from zero).
Many sectors of the private-sector economy are expanding. Professional and business services added 48,000 jobs in September. Health care added 44,000. Technology companies continued to expand. And even construction began to show some growth after seven months of stagnation.
“In general, what we hear from our customers is that their businesses are doing OK,” says Scot Melland, CEO of Dice Holdings, which runs specialized career websites in the technology, financial services, and healthcare industries. “But there is a concern about the financial crisis in Europe and, as a result, the future.”
Such fears are understandable. If Europe’s financial system plunges into chaos, it would ripple throughout the world, slowing growth and hurting global banks. If Greece defaults precipitously on its debts, it could weaken confidence in other indebted nations’ sovereign debt.
By the market's close, however, any positive momentum from the jobs report was lost to worries about new downgrades of Spanish and Italian debt. All three major stock indexes closed down modestly.
Such worries weigh heavily on Wall Street, and not just in terms of sentiment. The US financial sector lost 8,000 jobs last month, more than any other sector except government (-34,000) and manufacturing (-13,000), which employ more people.
When the financial sector is contracting, it's hard for the economy to recover strongly. And it doesn't help that many of the analysts who are making those gloomy forecasts also happen to work in that sector.
This doesn't mean that Wall Street is out of touch. Analysts worry about looming threats to growth, which aren't as visible from Main Street. And they understand that last month's job growth is still, by historical standards, incredibly weak for an economic recovery.
The economy has to create more than 103,000 jobs a month simply to absorb the natural growth in workers, let alone cut into the nation's still-high unemployment rate.
The disconnect is about expectations. Prepared for the worst, Wall Street still seems to be expecting a strong rebound. Main Street has adjusted its expectations downward.
“This is not the strong recovery we’d all hoped for,” says Mr. Melland. But “at this point we've come to the realization that this is not a normal recovery.”