WSJ Writers Note Absence of Recession; AP's Crutsinger Still Holds Out
Someone forgot to tell the Wall Street Journal's Kelly Evans and Justin Lahart, carried here at the Arizona Republic, that they're supposed to portray the economy in a bad light whenever and wherever possible. I'll get to the pair's report later.
That "bad light" directive seems seared into the minds of the Associated Press's Martin Crutsinger and his AP colleagues, as they continue to "cling to recession," and attempt to convince consumers and businesses that if perchance we're not already in one, it's just around the bend.
The AP's persistence has borne dreadful fruit. Relentlessly downbeat reporting during at least the past six years by the wire service's business reporters -- who largely determine what most Americans see, hear, and read about the economy -- is a big reason, if not the most important reason, why most Americans, as seen in the latest consumer confidence report, have a negative economic outlook and are convinced that we are in a recession.
Friday, Crutsinger worked mightily to take the lemonade that was the good housing starts report and turn it into lemons:
Construction of new homes increased by the biggest percentage in more than two years in April, a rare spot of good news amid the worst downturn in housing in more than two decades.
Analysts, however, played down the increase, noting that all the strength came from the volatile apartment sector. They said the painful housing slump is far from over as a record flood of foreclosures continues to add to the sizable stockpile of unsold homes.
..... The correction has proven to be a serious drag on the overall economy, raising worries that the country could be in danger of falling into a recession.
A second report yesterday showed that consumer confidence as measured by the University of Michigan/Reuters survey fell to a 28-year low of 59.5 in early May, down from 62.6 in April. The drop was blamed in part on rising concerns about higher gas and food prices.
Well, at least the AP reporter seemed to be acknowledging that we're not currently in a recession.
But earlier today, in a story about a speech by Treasury Secretary Henry Paulson, Crutsinger found some curiously unnamed others to do it for him:
Treasury secretary says markets are calmer now
Treasury Secretary Henry Paulson said Friday that financial markets are "considerably calmer" now than they were two months ago. He predicted the economy will be rebounding by the second half of this year.
The economy has been pushed to the brink of a recession by a prolonged housing slump, a credit crisis, soaring energy prices and more than a quarter-million job layoffs over the past four months.
In his remarks, Paulson never used the word recession, although many private economists believe the country is in one.
But he did forecast that the stimulus checks going to 130 million households would help spur growth in the second half of the year.
Part of the problem with Crutsinger, AP's business writers, and others is that they really don't seem to understand that no one can show that "a quarter-million job layoffs" have occurred (starting point for obtaining the data below is here):
What HAS occurred is that total employment in the economy on a seasonally adjusted basis has gone down by 260,000 so far this year. But on the ground in the past four months, larger than usual job reductions in January, many of which represent seasonal workers leaving the workforce, were followed by smaller than usual job increases in February, March, and April. The net change is a pretty big negative number (-1,209,000), and does not compare well to the same months in the three preceding years. No one around here is claiming that the employment situation is wonderful, because it isn't.
But no one, not even AP business reporters, can tell whether how much of these changes represent layoffs, voluntary terminations, firings for cause, retirements, or merely returning home after working the Christmas season or the post-Christmas retail closing season. Crutsinger's characterization of what has occurred as "a quarter-million layoffs" (or "pink slips," a favorite term of AP's Jeannine Aversa) makes it look as if one can identify each person in the reported number by name. These and similar renderings by other AP business reporters during the past few months are totally disconnected from reality.
Clearly, we aren't getting enough of the balanced output exemplified in the report by the WSJ's Evans and Lahart.
In fact, given what we've been fed for so long by AP, what the pair wrote Thursday will come as a shock to some (original was published Wednesday in the Wall Street Journal; original title was "Recession? Not So Fast, Say Some"; link may require paid subscription; bolds are mine):
As recession fails to materialize, economists revise predictions
A funny thing happened to the economy on its way to recession: It has taken a detour.
That, at least, is the view of a growing number of economists, including some who not long ago were saying a recession was all but inevitable.
They note that stock and credit markets have steadily improved since the Federal Reserve intervened to keep Bear Stearns Cos. from bankruptcy in early March, while a series of economic reports have been stronger than expected.
..... "A couple months ago it seemed like we were on the abyss," said Jay Bryson, global economist with Wachovia Corp., referring to the seizing up of credit markets and the collapse of Bear Stearns. "Things have changed. . . . The numbers we've seen recently haven't been as bad as we were led to believe just a few months ago."
..... Job losses, meanwhile, have been less severe than they usually are in recessions. Many economists think the government's earliest estimate of first-quarter GDP growth - 0.6 percent - will be revised upward. After reviewing the retail-sales data, economists at Global Insight, a Waltham, Mass.-based forecasting firm, predicted the government would increase its assessment of GDP growth in the first quarter to 1 percent at an annual rate. They forecast continued growth in consumer spending, partly because of tax rebates and stimulus checks.
In February, Global Insight joined Goldman Sachs, Morgan Stanley, UBS and Merrill Lynch in declaring the U.S. to be in recession. Now, Global Insight's Brian Bethune says that while the firm is still forecasting a recession, "it's conceivable we could avoid it" .....
When are the luminaries just cited, who just a few months ago said that a recession had already begun, going to say, "We were wrong. We are sorry"? And how could the crack AP business reporting corps not have picked up on the change of sentiment reported by Evans and Lahart?
Cross-posted at BizzyBlog.com.