Economic data always threaten to bear us back, like "boats against the current" in the closing line of F. Scott Fitzgerald's The Great Gatsby, ceaselessly into the past.
Such was the case this past week, when a surprisingly weak initial gross domestic product report showed that the American economy grew at an annualized rate of just 0.2 percent in the first quarter. Fresh concerns about the economic recovery ensued, sending stocks on a roller-coaster ride and recalibrating expectations about the economy.
But the most important use of backward-looking data is to sketch out what the future may bring. And the outlook for the American recovery may be bright indeed.
Thursday brought two very encouraging signs about the labor market. Initial unemployment claims fell to 262,000 for the week ended April 25th, the lowest reading in 15 years. And in the more backward-looking employment cost index, U.S. wages were shown to have risen by 2.6 percent in the first quarter versus the year prior.
On Friday, investors should get a decent flavor of how the past month shaped up, when the April employment report is released. Many economists are expecting to see positive signs in the report.
"Given the sturdy trends in jobless claims and tax receipts, we expect a meaningful rebound in April employment," wrote Joe LaVorgna, chief US economist at Deutsche Bank, in a Friday note.
More generally, the fact that GDP has tended to disappoint in the first quarter—only to bounce back substantially in the second—is a trend that has been lost on few.
For instance, final GDP in the first quarter of 2014 (which fell considerably from the initial reading) came in at negative 2.1 percent; the Q2 reading that followed showed 4.6 percent annualized growth.
An analysis by CNBC's Steve Liesman found that over the past 30 years, annualized first-quarter GDP growth has come in at 1.87 percent while the economy has grown 2.7 percent. That was statistically significant enough to lead the GDP tabulators at the Bureau of Economic Analysis to remark to CNBC that "BEA is currently examining possible residual seasonality in several series."