Two economic reports just out suggest that the fundamentals may not be solid. Jobless claims spiked and durable goods orders were worse than expected. People without jobs have a harder time supporting economic growth -- they bear two-thirds of the burden for that. And if businesses -- which are big buyers of durable goods -- shoulder the other third, it would not be too surprising if GDP was shrinking.

Jobless claims increased by 32,000 to 493,000 in the week that ended September 20 -- 50,000 claims were due to Hurricanes Ike and Gustav -- from a revised 461,000 the prior week. Economists in a Bloomberg News survey got it wrong -- expecting a drop to between 450,000 from 455,000. Through August, the economy has lost 605,000 jobs. It is likely that more job losses are on the way.

Meanwhile a 4% drop in durable goods bookings was more than twice the drop that economists had projected. According to Bloomberg News, 74 economists it surveyed expected a 1.9% decline after previously reporting a 1.3% increase in July. Since companies generally take out financing to purchase durable goods, the clenching of credit markets could be contributing to the larger than expected decline.

The right thing to do is to encourage the natural process of cleaning the excess out of the bubble economy. The sooner we get through this pain, the faster we can start to rebuild.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.