Is the US economy on its way to recovery or not?

Some would point to the results of the bank stress tests as a green shoot with 10 of the 19 largest banks needed to boost their capital by a combined total just shy of $75 billion. Not as much as many expected, prompting officials and industry experts to say it's a sign that the US is on the road back again. "The results are not as bad as feared. The economic conditions are improving and the economic trough is not too far away," economist Sung Won Sohn, a professor at Cal State Channel Islands and a former Wells Fargo executive told the Los Angeles Times.

Of course, that ignores the main criticism of the stress tests that officials had set the bar too low, something I raised in a blog entry this week.

And while The Wall Street Journal says the economy might be finding its footing with the pace of job losses tapering off, it's important to remember that payrolls have fallen by 5.7 million since December 2007. That amounts to 4.1% of payrolls which is the biggest percentage decline since the 1958 recession. Unemployment will continue to rise, so any recovery is some time off.

Add to that the reports that US consumer credit fell by a record $11.1 billion in March and loan delinquencies continue to rise, although they're starting to level off. As a result, banks are still making it harder for consumers to get credit card loans, according to a Fed survey reported here.

What this data shows is that the US is a long way off from recovery. Any talk of green shoots is premature.