Economy Improves, Old Media Ignores
Those who are rooting for the economy to go into a tailspin cannot be pleased.
First, the government told us that the economy grew 0.6% in the first quarter.
I wasn’t happy, because I’d like to see the economy get back to at least the 3.2% average growth it experienced from the second quarter of 2003 through the third quarter of 2007. But many in the business press seemed displeased for the opposite reason — that the number wasn’t negative. Since the everyday working definition of a “recession” is “a decline in GDP for two or more consecutive quarters,” it meant that there is no solid evidence of a recession.
Nevertheless, the Associated Press’s Jeannine Aversa insisted that “a growing number of economists believe the economy is in a recession and is indeed contracting now.”
Rex Nutting at MarketWatch.com went way over the top, as you can see from these article excerpts:
U.S. could have recession without drop in GDP
Analysis: Growth isn’t everything; jobs and incomes count more… The economy may be on track for the first recession in U.S. history without any quarterly decline in growth.
… GDP is a pretty crude measurement of economic well-being.
… GDP is a quarterly accounting gimmick that may not be an accurate reflection of the economic reality.
… With GDP showing a small positive number in Wednesday’s report, no doubt many people will cheer that the economy has therefore avoided a recession. But that’s not what the other economic numbers show.
Nutting, MarketWatch’s Washington bureau chief, quoted no outside economist, analyst, government bureaucrat, think tank researcher, or anyone else to back up his extraordinary claims. I have never seen anyone call GDP a “crude measurement” or an “accounting gimmick.” If I were working at Uncle Sam’s Bureau of Economic Analysis, I’d feel insulted.
Fortunately for the rest of us, the “economic numbers” that followed last week’s GDP report do not support Nutting’s peculiar notion of “recession with growth.” On Friday, the government’s employment report showed that the economy added over 700,000 jobs in April. That’s right. Here’s the proof:
As you can see, government’s best estimate is that 703,000 more real people were actually working in April than were in March, and that 1,810,000 more were really doing so in April than in January.
If you’re surprised, I don’t blame you. Rex Nutting may be too.
That’s because the “official” jobs increase or decline and the unemployment rate are both adjusted for seasonality, or changes in real employment levels that have occurred in previous years. The fact that the number of jobs added in April 2008 was less than the number added in previous Aprils goes a long way towards explaining why the most recent seasonally adjusted jobs change was a loss of 20,000.
The business press has abused the seasonally adjusted job-loss numbers for the past three months by pretending that they represent actual people thrown out of work. They do not. The AP’s Aversa was a primary offender last Friday, as she wrote:
Employers eliminated 20,000 jobs in April.
… It was the fourth straight month that employers cut jobs — bringing total losses to 260,000.
… Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already.
… On the employment front, construction companies, manufacturers, retailers, mortgage brokers, and temporary help firms were among those shedding jobs in April.
Almost none of what Aversa cited above happened in the real world. Except for manufacturing, every major sector of the economy had more workers in April than in March.
To be clear, compared to previous years, April’s jobs increase was not as great as one would hope to see. But it was at least closer to the previous two Aprils (within 157,000, on average) than January’s decrease or February’s and March’s increases were to their comparable 2006 and 2007 figures. More improvement is needed, but April at least headed in the right direction.
Oh, and April’s unemployment rate, seasonally adjusted, fell 0.1% to 5.0%; the unadjusted rate fell from 5.2% to 4.8%.
Finally, the recent news from the Institute for Supply Management (ISM) has been very good.
Last Thursday, ISM reported that manufacturing’s 15% of the economy, while still slightly contracting, held steady. Its Manufacturing Index came in at 48.6% (any reading above 50% indicates expansion; below 50%, contraction).
On Monday, ISM’s Non-Manufacturing Index, covering the remaining 85% of the economy, including the troubled housing and financial services sectors, leaped into expansion mode with a reading of 52%. That was up 2.4% from the previous month and confounded the “experts,” who had predicted that it would go down.
Then on Tuesday, ISM had the nerve to issue its spring 2008 Semiannual Economic Forecast, which said: “Economic Growth to Continue Throughout 2008.”
If you think you heard “How dare they!” murmurs from the business press, you may be right.
Tom Blumer owns a training and development company based in Mason, Ohio, outside of Cincinnati. He presents personal finance-related workshops and speeches at companies, and runs BizzyBlog.com.
I wonder why that happens? Could it be that a great many economists are actually biased? What would account for the difference between fairly interpreted data and ignoring positive results?
Is it possible that some people close to the media have a political or institutional bias? Do they skew their conclusions to further a personal viewpoint?
Since I am a right wing Republican , the answer seems pretty obvious to me .And how do I know? Because the opposite never happens. That seems pretty unlikely in a fair and random world. So one must conclude that the opinions and summations from economists in general is fa
lse.
The same yardstick can be applied to any number of questions from the environment and education to religion or history.
To a Liberal “fairness” is when everything is expressed in their terms. That is the reality of the USA today, and I’m not talking about the daily paper .
It becomes helpful in simplifying ones life by speeding up the process of sorting out what is useful and what are lies. It is a general filter but it helps to screen out the mountain of BS one encounters each day. Truth and sanity are still more desirable than political correctness.
Isn’t “recession with growth” an oxymoron (emphasis on the moron part). Maybe it is the first time in U.S. history because it is impossible.
First baseball and sports generally ruined by drugs. Now this. If this guy is serious, I wonder which of the psychedelic drugs he’s on.
Pay-ote.
NO SURPRISE HERE, MUCH OF THE MEDIA SPECIALIZES IN FEAR-MONGERING.
AMERICANS NEED TO GO ON A SERIOUS CREDIT DIET.
IF THE CURRENT CONDITIONS IN THE MARKET I.E THE RISE OF GAS AND FOOD PRICES CAUSE AMERICANS TO SERIOUSLY STOP AND THINK ABOUT THEIR PURCHASES, I SAY “GOOD.” IF IT FORCES US TO PAY DOWN CURRENT REVOLVING DEBT I SAY “EVEN BETTER.”
MUCH TO THE MEDIA’S CHAGRIN I AM NOT CONCERNED ABOUT THE FUTURE OF OUR ECONOMY,RATHER I WELCOME THIS CURRENT BELT TIGHTENING AS A WAKE UP CALL.
RECKLESS SPENDING WITH LITTLE OR NO CONSEQUENCE WILL SIMPLY LEAD TO MORE RECKLESS SPENDING WITH SERIOUS AND PERHAPS EVEN DIRE CONSEQUENCE.
I agree there is left wing bias in the media and so long as a Republican is in the White House, news will be slanted negative.
However, I do believe the news media plays up negatives as a normal course of business. I have to believe there is only one rea$on for doing thi$.
I would love to see a news outlet called the “Optimist” that only printed stories with an optimistic point of view. Unfortunately, I fear that “OMG, your going to die” headlines will always sell more newspapers than “Sunny Blue Skies” headlines.
this ..”TOHOGlobalassociates” that exhibits the booth…
http://www.t-ga.co.jp/investor/index.html
It was reported that former President Vladimir Vladimirovich Putin visited the booth that they exhibited while it was because it was a very small company that said only 14 people of the number of employees at the end of last week and it had spoken very highly greatly with media of Russia.
It is the former mayor of introduced SOCHI and is “Rus”, and Ltd the career of Mr. Leonid Mostvoi Care easiness to do the explanation in the booth taking out and ardently as for the president Mot of the match of time in 2014 to the held SOCHI Olympic Winter Games and the plan to make an artificial island and becoming empty in the SOCHI city in the Black Sea coast that is a high-level resort the content. Economic adviser of President of the Senate of Russian assembly of mayor of vice president Krasnodar state sub-governor Soti city (present duty)
Moreover, Mr. Leonid Mostvoi is being announced now the outside director
candidate in this company ･･･.