Washington: There is an old joke in journalism that if three of anything happens, you've got a trend story, no matter how vaguely tied together the three things may be.

In economics, however, three data points can tell you something. Consider three events last week:

n On Wednesday, the Commerce Department reported that January new-home sales dropped 11.2 per cent from December, plunging to their lowest level in nearly 50 years.

n On Tuesday, the Conference Board reported that February consumer confidence fell sharply from January, driven down by the survey's "present situation index" — how confident consumers feel right now — which hit its lowest mark since the 1983 recession. On Friday, the Reuters/University of Michigan consumer sentiment survey also showed a falloff from January to February.

n Last Thursday, the government's report on new jobless claims filed during the previous week shot up 22,000, which was exactly opposite of what economists predicted. Forecasters expected new jobless claims to drop by about 20,000.

Taken together, what do these reports tell us?

We've got a long way to go to get out of this economic mess, and we actually may be losing a little ground.

About the only thing this economy has going for it right now is surprisingly low inflation. Federal Reserve Chairman Ben Bernanke told Congress last week that his central bank foresees low inflation for the rest of this year, which at least will keep prices down. If we had inflation on top of high unemployment, we would see the return of Jimmy Carter-era "stagflation", a noxious combination of stagnant economic growth and high prices.

Of the three pieces of data that we're focusing on, the new-home sales figure is probably the most troubling, because it could represent a step backward in the recovery. Consumers can say one thing to a survey, but they vote with their pocketbooks. If they don't feel confident about the economy, they stop buying new homes.

Sales of new homes make up only about 25 per cent of the entire housing market, but they are closely tied to construction and manufacturing jobs, and shine a light on the health of those sectors.

The fact that new-home sales dropped so precipitously in January even with low mortgage rates and an extension (and expansion) of the government-subsidized home-buyer credit tells you just how weak demand is. Sales of new homes peaked in July and have been slipping ever since. This crisis began with plummeting housing prices. It will not end until housing prices hit bottom, and they're not there, yet.

Blame it on snow

On the unexpected rise in new jobless claims numbers, the more optimistic are blaming the snow: They say the most recent claims number was boosted by a processing backlog, because government offices were closed during the nationwide snowstorms and couldn't process new jobless complaints at a steady rate.

But take a look at the four-week moving average of new jobless claims, which smooths out volatility. That number is up 6,000 to 473,750. That's going the wrong way. One year ago, new jobless claims were numbering 670,000 per week. They now stand at 70 per cent of that. That's good. But they seem to be stuck where they are.

Also, we need to understand that these three pieces of data are highly interlinked and feed off one another. They do not occur in their own vacuums.

With the nation's official unemployment rate at 9.7 per cent (and the truer measure of unemployment at 16.5 per cent), everything in this economy is pivoting on jobs. Each new person who loses his job — and files a claim — is one less person who is likely to buy a new house, or much of anything else, for that matter.

And, if that person is one of the 5,000 who was contacted by the Conference Board's survey, then it's a good bet that person will say he is pessimistic about the economy. As the chain goes on, don't forget employers are feeling less optimistic about the economy, which makes them more likely to contract and lay off workers.

Also, we need to look at the world outside these three pieces of data. The stock market rallied 60 per cent from the March 2009 bottom to mid-November of last year. Since then, it's done little but go sideways. People — investors, traders, holders of retirement accounts — notice that. It changes the way they think. The euphoria of the 2009 rally is over. It has been replaced by caution, uncertainty and a hard-to-shake sense that we haven't hit bottom yet.

And that, as much as anything, is what's holding back economic recovery.