Media Make Economic Storms Out of Silver Linings
Wednesday's Example of Media Bias — Posted on May 21, 2008
The American news media declared the U.S. economy in “free fall” as it slowed in March of 2008. But much economic data hasn’t supported that negative view. Recently journalists have wrung the negatives out of stronger-than-expected numbers for retail sales, consumer spending and economic growth, as well as lower-than-anticipated job losses.
“The job market is crumbling,” complained CBS’s Bianca Solorzano on March 3, 2008, despite an unemployment rate of about 4.8 percent. By contrast, ABC reporter Jerry King called the summer of 1996 under President Bill Clinton a time of “strong economic growth and low unemployment” on the Aug. 4, 1996, “World News Tonight.” At that time the unemployment rate stood six-tenths of a percent higher at 5.4 percent.
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Some media outlets reported positive news but warned people not to get the wrong idea, or even suggested it confirmed “recession” fears.
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Expecting the Worst
The media often announced what experts “expected” before economic data were released, but weren’t always on target. When “better-than-expected” information came out, journalists would usually mention it, but rarely with a positive tone.
For example, in April the United States lost 55,000 fewer jobs than the anticipated 75,000. Trish Regan had been concerned about jobs on the May 1 “NBC Nightly News.”
“If worries over food and gas prices aren’t enough, there’s also the concern about jobs. Some poor weekly numbers out today; this is ahead of tomorrow’s all-important April jobs report. The unemployment rate is expected to tick higher with as many as 75,000 jobs lost last month,” said Regan.
Regan’s follow-up report after the release of the actual figure of 20,000 jobs lost was one of the few that proclaimed it as a “good sign” for the economy.
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The May 2 Washington Post and The New York Times both reported the expectation of a 75,000 net loss of jobs in April. “Investors are predicting another gloomy reading on U.S. employment Friday,” said the Post. The Times reported “a big reduction in jobs and increase in unemployment could put a damper on Wall Street’s enthusiasm.”
The next day the Post reported fewer job cuts as good news, while …the Times claimed on May 3 that “many economists took [the jobs release] as powerful evidence that the United States is almost certainly now ensnared in a recession.”
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Retail Sales Figures Ignored or Distorted
Retail sales figures that beat expectations were also distorted or ignored by the downbeat media.
Bloomberg reported economists it surveyed expected a 0.2-percent decline in overall retail sales in a report on May 11. But that story didn’t mention higher-than-anticipated same-store sales released just days earlier.
“Sales at U.S. retailers probably fell in April as the biggest housing slump in a quarter century, record gasoline prices and the loss of jobs took their toll, economists said before reports this week,” said a Bloomberg.com story on May 11.
Same-store retail sales actually saw a 3.6-percent gain over a “projection of only 2 percent growth.” According to that CNBC.com story, “It is irrefutable that sales in April were much better than expected.”
The National Retail Federation said “retailers finally have a reason to cheer” in its May 13 press release.
The three major networks have mostly ignored the retail figures. A Nexis search found only one report by the CBS “Early Show” – it was three sentences long.
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CBS’s Spin Cycle
CBS remains the consistent leader of negative economic reporting on network television, and that was no exception as the jobs and consumer spending data were released.
Katie Couric presented the “not quite as bad as it has been” news on May 2 that April job losses were lower than expected, but any encouragement that might have provided was wiped out by Anthony Mason’s report that followed.
Mason quoted an unidentified man who claimed, “It’s hard to find a job. Most companies are closing down.” Mason didn’t refute the point; instead, he went on to say “as the economy lost jobs for the fourth straight month, construction, manufacturing and retail took the hardest hit.”
A few moments later CBS’s “grim reaper” said, “Discouraging news for college seniors about to graduate.”
Just a day earlier, after the Commerce Department announced the increase in consumer spending for March, Couric went negative by blaming the good news on food inflation.
“[T]he government reported today that consumer spending in March shot up twice as much as economists were expecting, and it’s not because we’re buying more – it’s because the prices are so much higher, especially food,” said Katie Couric on May 1.
Consumer spending went up 0.4 percent in March, according to the Commerce Department – doubling the forecasts.
Like Couric, the Associated Press also placed the blame on higher costs. “Don’t be fooled by a larger-than-expected increase in consumer spending,” warned a May 1 AP article. “People aren’t buying more – they’re just paying more for what they buy.”
But that’s not accurate, according to economist Dr. John Lott.
“The first notion that somehow you could explain the entire increase in consumer spending is due to higher prices – if you double consumer spending, the only way that statement would make sense is if the price level doubled in a month,” said Lott, who is also a BMI adviser.
That May 1 “Evening News” segment focused on food prices that “skyrocketed” including flour, eggs, milk and pasta, which Lott also said distorts the picture of food inflation.
“When you’re talking about all food, you’re not spending it all on pasta. Some portion of it is going up, but oranges have fallen by like 35 percent. You have drops in the price of lettuce and other things, too. And the average on the course of a year is going up about 5 percent – that’s the relevant number,” explained Lott.
So Here’s the Good News …
Occasionally the media did a better job at handling the economic data. … CLICK HERE to read the good news at BusinessandMedia.org