It's one thing to run faster in place when the rest of the economy is stagnating as well. But it cuts a little deeper when policymakers are telling you the economy is fine, and you are falling behind.

Like the rest of the economy, the housing market is clearly showing the effects of the Sept. 11 attack on America,

With the economy weak and fuel prices still relatively high, we and the rest of the industry were experiencing a very difficult financial quarter even before the September 11 attacks. But the attacks and their aftermath further weakened traffic and had a staggering effect on our overall financial performance.

Even if the economy recovers smartly for the rest of this year and the next, the ongoing slack in the economy may still lead to continuing disinflation,

We are in the midst of a protracted wage slump, ... a troubling trend that is largely going unnoticed by policymakers.

This decline [in the jobless rate] is certainly the largest drop we've seen in recent months, so it does suggest a stronger labor market than we expected.