Today It's Reuters' Turn to Bash the Economy
As reported here yesterday, the Associated Press thoroughly misrepresented and understated better than expected inflation data that was released by the Labor Department. Today, Reuters botched a report released by the Commerce Department concerning retail sales:
“U.S. retail sales dropped by a larger-than-expected 2.1 percent in August, the sharpest drop in almost four years, after car purchases collapsed from July's near-record level, government data showed on Wednesday.”
Unfortunately, Reuters chose not to inform its readers that the drop in car sales was expected for a number of reasons. First, July was a blowout month for automakers due to huge incentives. Second, August is historically a bad month for the car industry as it prepares to rollout the new model year in September.
Here’s how Bloomberg reported the same data:
“U.S. consumers kept spending on goods other than automobiles, and factories kept humming last month, evidence the economy was able to withstand record fuel costs prior to Hurricane Katrina.
“A predicted slowing in auto sales pulled August retail spending down 2.1 percent, the biggest drop since November 2001, the Commerce Department said today. Economists instead focused on a 1 percent gain in all other purchases that was twice as much as expected. The Federal Reserve said today that manufacturing output rose 0.3 percent last month, contributing to a 0.1 percent gain in industrial production.
“‘The consumer was in fairly good shape before Hurricane Katrina,’ said Dean Maki, chief U.S. economist at Barclays Capital in New York. `Sales were strong virtually across the board.'
“Sales of furniture, electronics and personal care products rose last month even as auto sales slumped after a discount- driven surge in July. Rising employment and incomes may be enough to keep consumers spending even amid a further jump in fuel costs after Katrina struck Aug. 29 and disrupted energy production in the Gulf Coast, economists said.
“`While consumers are forking over a lot of money on gasoline, they continue to spend elsewhere,’' said Joseph LaVorgna, chief U.S. fixed income economist at Deutsche Bank Securities in New York. `This tells us that job and income prospects are better than what is commonly understood.’''
Certainly better than what is commonly understood by this Reuters reporter.