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Authors contend :

While both months were disappointing when compared with previous recoveries, the data shows six consecutive months of private-sector job creation.

The authors then attempt to tackle the under counting of those unemployed argument :

When 805,000 more people said they were looking for a job in April, the pessimists said, “See how many people had been discouraged ... the unemployment rate will never fall as they start looking again.” And in June, when the labor force fell by 652,000, they said, “This is the only reason that the unemployment rate fell.”

This is crazy. It defies common sense. Economic data is volatile, so quarterly data might be better. And in the second quarter the U.S. added 357,000 private-sector jobs—more than 50% greater than the 236,000 added during the first quarter.

Authors then point towards other indicators ....

* New orders for durable goods, a leading indicator, are up 10% at an annual rate in the past three months. Excluding transportation, they are up 25%. If we look at just machinery orders, they are up 63% in the past three months and 23% in the past 12 months. This is not a depression.

* Fears of a repeat of 1932 are based on a faulty comparison with history. In 1932 the M2 measure of the money supply fell by 16.5%—the third of four consecutive yearly declines between 1929 and 1933. Meanwhile Herbert Hoover pushed through the largest tax hike in American history. The lowest tax rate rose from 1.5% to 4% (at $1 dollar of taxable income), the 6% rate (which kicked in at $10,000) rose to 10%, and the top rate more than doubled from 25% to 63%. WE ARE NOWHERE NEAR THAT RATE.

* Today the M2 measure of money is growing, and tax rates, while scheduled to go higher in 2011, are nowhere near the levels of the 1930s. And there is no Smoot-Hawley Tariff Act.

* Productivity is so strong that the economy is growing despite massive increases in the size of government.

* The U.S. is creating jobs, even if the rate of growth is less than previous recoveries. Profits are still rising. In fact, analysts are still raising earnings estimates.

* The Stock market has so much negativity priced in that it is cheap on just about any basis. Based on forward earnings, the PE ratio for the S&P 500 is under 12. And our capitalized profits model shows that stocks are severely undervalued.