CNBC's Santelli Right, 'Experts' Wrong; Unemployment Spikes to 9.1%
CNBC panelists and guests always make predictions in the minutes leading up to the Labor Department's release of the jobs report and June 3 was no exception.
While economists Diane Swonk and Mark Zandi and CNBC's own Steve Liesman all made predictions of job gains between 100,000 and 150,000 - Rick Santelli threw his own lower prediction in just seconds before the announcement: 55,000. (Video available here)
Santelli was the only one on CNBC to come close to the actual data of 54,000 jobs added. The May gains were less than one-fourth the size of April's gains. The unemployment rate also climbed to 9.1 percent. Reuters and other outlets immediately called the gains "less than expected," but even CNBC's predictions revealed that many in the media refuse to see the weakness of the economy and remained convinced the economy is in "recovery."
CBSNews.com called it a "sluggish recovery," but a recovery none the less on June 3, 2011. The New York Times reacted to the jobs report saying the hiring slowdown was "raising concerns once again about the underlying strength of the economic recovery." The MSNBC.com headline for the jobs report said the "recovery hits rough patch."
Many in the news media continue to spin bad economic news positively for the Obama administration, just as they did in 2010. After Obama's "recovery summer" ended with 14.9 million Americans still unemployed and worrisome housing and GDP data, the mainstream media went out of the way to support the stimulus and find any "bright spot" they could. Speaking about a 9.6 percent unemployment rate, Fortune's Shawn Tully said "This is actually not such bad news." Try telling that to the millions of unemployed Americans.
The media have particularly refused to sufficiently scrutinize the adminstration on the issue of unemployment. Reporters have grasped for any positive indicators they can find, but rarely criticized Obama for the lengthy stretch of high unemployment. In 2009, the rate hit a 26-year-high and the United States saw the most jobs lost in a single year since 1940, yet journalists omitted the failure of the stimulus package and refused to hold Obama accountable for the jobs losses.
In 2011, the media have clung to the recovery theme despite the failure of the stimulus package to keep unemployment below 8 percent, despite lower home prices in "double-dip" territory and the even the 1.8 percent GDP growth in the first quarter which was "well below expectations" and little more than half the fourth-quarter economic growth.
A day before the Labor Department's announcement, the National Federation of Independent Business (NFIB) put out a warning about the May 2011 jobs report. It was posted on Business Insider June 3:
"May's job numbers will disappoint; meaningful job creation on Main Street has collapsed," William C. Dunkelburg, NFIB's chief economist, said in the statement.
Dunkelberg also said, "With one in four owners still reporting 'weak sales' as their No. 1 business problem, there is little need to add employees, especially with the uncertainty about future labor costs arising from new regulations and legislation. And, if Congress doesn't deal effectively with the trillion dollar deficit, we've got plenty to keep us worried."