A study released today by the slightly left-of-center Project for Excellence in Journalism confirmed what many NBers have suspected for a while: the media's negative coverage of the economy affects public opinion.
According to PEJ, the public's concern about the economy as an issue has always outstripped that of the media. That's pretty normal considering that America's economy is one of the few large news stories that affects the average person.
Where things change, however, is in the public's perception. There seems to be a direct correlation between increases in negative media reports about the economy and lower amounts of public confidence in the economy:
While other factors could have contributed to declining public confidence in the nation’s fiscal health, American’s anxiety about the economy intensified as media coverage increased.
In other words, even if the media did not manufacture that public concern, more coverage may have reinforced those worries and confirmed for people that their fears are justified.
As an example, in January this year, 26% of Americans considered the economy to be in excellent or good shape, while 28% considered in poor shape. By March, after news coverage more than doubled from the previous quarter, those numbers had changed markedly for the worse. Only 11% now considered the economy to be in excellent or good shape, while the percentage of Americans who considered the economy to be ailing had doubled to 56%. 
What’s perhaps more dramatic is the relationship between public worry over rising oil and gas prices and increases in coverage. In January, 3% of Americans considered energy prices the most important problem facing the country. By July, that number had jumped to 19%, compared with 17% who thought the war in Iraq was the top problem. Americans now also considered it the No. 1 element of the economic crisis. 
That jump in concern over gas prices coincided precisely with a jump in coverage of the issue. From the first quarter of 2007 through the first quarter of 2008, gas and oil coverage never even reached a single percent of the coverage. In the second quarter of 2008, it increased more than five fold, and by June was an even bigger story than the U.S. economy generally.
Phil Gramm, call your office.
There's lots more interesting data in the study including how the "old media" seem more concerned about bad economic news than newer media like web sites and talk radio. Projection, anyone?