The Most Important Number of the Week Is Zero

It may be a cliche, but there’s truth to the saying that if something sounds too good to be true, it probably is. Equity markets were flying high through the first four months of the year as economists played a version of “can you top this?” by jacking up their predictions for 2021 U.S. economic growth to the highest since the first half of the Reagan administration. The latest surveys have gross domestic product expanding 6.5% as more of the economy reopens and Congress passes sweeping fiscal stimulus measures. In December, those forecasts averaged around 3.70%.

Now, though, investors might want to ask whether those lofty estimates are too good to be true. Recent reports on everything from jobs to retail sales and consumer confidence to existing home sales show that the economic recovery from what was the sharpest downturn since the Great Depression will be anything but linear. Citigroup Inc.’s Economic Surprise Index, which measures the degree to which data is either beating or missing expectations, fell below zero on Thursday for the first time in almost a year before ending a bit higher.