Yesterday Good Morning America declared the recession was over. Good news for all of you jobless people whose houses are being sold for less than their value because you are defaulting on your credit cards, student loans and having to move in order to find a low paying job just to get by.

How do we know the recession is probably over? Bloomberg has a story in which Barry Knapp from Barclays Capital looks at some indicators and declares April may have been the end. Well at least that is one less thing to worry about.

OK, OK, if you didn’t pick up on it that was sarcasm. Here is what I think. The GMA piece based on Knapp’s conclusion use indicators that are strikingly similar to those I wrote about the other day in a post entitled ‘Meaningless Indicators’. Knapp saw that service sector job losses were only 229,000 in April which is down from 384,000 in March. Amazing! It went down, must be a recovery.

However that is still 613,000 service sector job losses in just the last two months alone. He believes the service industry may have “overshot” and let go of more employees than they needed while demand for goods may actually be rising. He sees recovery!

The problem? Will they re-employ 613,000 workers PLUS the hundreds of thousands lost over the last year? No, of course not. Will the other sectors that let go of people take them on? No, not likely because there are hundreds of thousands of employees who were working those jobs who are now unemployed. If there is a rise in demand and by a miracle these companies reopen closed production facilities or build new ones & do it in America rather than China or some other place with cheaper labor, they will probably hire those people first.

The GMA story & every other piece I see written or reported that paints a rosy picture ignores the cumulative effect of this downturn. It ignores the total loss of jobs, the total loss of wealth and most importantly the long-term effects of printing and spending so much money by the federal government and by states. Our country has dug itself an economic hole so large it has no choice but to raise taxes in the near future. Raising taxes won’t inspire industrial growth.

Further all of these pieces look at numbers as islands not just in cumulative effect over time but parallel to other information. Yes housing is up, with an $8,000 government incentive and massive drops in home prices it was only a matter of time before those with money or those who think they will have money buy homes. This buying is also a massive upturn after a massive downturn. It is like being pulled down a foot in quicksand and celebrating when you pull yourself up an inch.

Do we know who is buying these homes? Do we know where the homeowners are going? (Foreclosures were up 21% in April) Do we know if those who are buying can actually afford to maintain the homes once purchased? (delinquencies rose 4% in Feb) These were questions never asked when looking at housing data before and that is exactly why we are in this mess.

What about credit? Where do we stand on credit card payments, defaults on loans, the student loan market? For our economy to truly rebound people will need to have enough wealth to repay all of their debt and consume. That means high paying jobs must be created, that means unemployment needs to have a massive reversal before those who are unemployed get themselves further into debt during their lapse in work, that means we need some kind of explosion in new sectors. The only explosion I am seeing is the creation of government jobs. Jobs that are not being developed in proportion to private sector jobs lost and that come at an economic cost for all of society.

There is always good news in times of bad but our media’s desire to take any positive economic news and spin it into a resurrection is not only dishonest but dangerous. Yes jobs have always been a historic “lagging indicator” but only if followed by massive job creation. There is little to suggest that our economy is going to revive itself in the near-term. I would love if it would, I would give almost anything to see us thrive again, but just as the media and government played chicken little with swine flu, WMD, Y2K they often are playing Pollyanna with the economy after saying we were on the precipice of economic disaster just a few months ago.