Industry NewsMarkets & Economy

Fighting flatline after stimulus

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Markets this week lost faith in recovery. Although it is far too soon to call a double-dip back into economic shrinkage, the May-June deceleration has the policy question in everyone's mind: Just what is going to get us out of this? Today's total-focus job data for June was the only report to arrive as-estimated, adding a measly 100,000 private-sector jobs. The gaps between forecast and actual in other data best describe the slowdown: the ISM manufacturing index was 59.7 in May, forecast 59, actual 56.2; May pending home sales were forecast to decline 12.7 percent on tax-credit expiration, actual was a 30 percent free-fall. Mortgage rates, near 4.75 percent, should have pushed purchase loan applications up last week, but they fell again, down 3.3 percent. Auto sales did rise 14 percent in June compared to 2009, but dropped 11 percent from May. The cause of this abrupt deceleration is a puzzle even to many who had been recovery skeptics. Some of the top suspects may be ter...