Media Sound Recession Alarm Again, Despite High GDP Growth

So, GDP grew at 4.9 percent - the highest growth in four years.

Instead of greeting the news with optimism about the American economy - right as the housing woes are setting in - the media used it as an excuse to hype economic downturn.

"The economy is slowing down so fast this quarter you can see the skid marks as it slams on the brakes," Stuart Hoffman, chief economist at PNC Financial Services Group, said in an Associated Press story on December 20.

The story also quoted former Federal Reserve Chairman Alan Greenspan, who isn't optimistic either.

"Former Federal Reserve Chairman Alan Greenspan and others say the odds of that happening have grown this year. Greenspan recently warned that the economy is ‘getting close to stall speed.'"

But, it went relatively unnoticed when Greenspan, on October 10, said "odds are better than 50-50 the U.S. will skirt a recession over the next six to nine months.

CNN Senior Business Correspondent Ali Velshi echoed the Associated Press and said economic downturn is pending.

"Now, the cloud around this one is that most people suspect the final three months of this year - of 2007 - will drop to somewhere between one and one-and-a-half percent and we could go lower next year," said Velshi.

CNBC's Steve Leisman, on the December 20 "Street Signs," reported the GDP data, but warned GDP growth could be zero for the fourth quarter.

"[T]here's the GDP number, 4.9 [percent]," Leisman said. "The expectation among some economists is those bars (on-screen graphic showing quarterly GDP) fall off a cliff and go down to one or two [percent]. Some say zero for the fourth quarter of the year."

Although this data is a lagging economic indicator, there was one beneficiary of the news that hasn't gotten much attention from the media - the strengthening of the U.S. dollar, even though it got a lot of coverage in November.