The Associated Press's Martin Crutsinger got out the gloom-and-doom paint in his report on the Consumer Price Index on Friday morning.
Here are his opening paragraphs:
Inflation rate jumps by biggest amount in 6 months
Inflation shot up in May at the fastest pace in six months, pushed higher by soaring costs for gasoline and other types of energy.
The Labor Department reported Friday that consumer prices rose by 0.6 percent last month, the biggest one-month increase since last November, as gasoline costs surged by 5.7 percent. Food prices, which have also been rising sharply, were up 0.3 percent as the cost of beef and bakery products showed big gains.
Core inflation, which excludes energy and food, edged up a more moderate 0.2 percent in May. But even there, core prices are up 2.3 percent over the past 12 months, above the Federal Reserve's comfort zone.
Trouble is, the markets weren't buying into the negativity Crutsinger was selling, as SmartMoney.com reported after the closing bell:
CPI Report Lifts Stocks
After a harsh warning from the Fed early this week, traders warmed the latest reading on core inflation. Stocks finished higher Friday on the latest reading of the Consumer Price Index. The Dow Jones Industrial Average gained 166 points at 12307. The Nasdaq picked up 50 at 2454, and the S&P 500 climbed 20 to 1360.
Of course, Crutsinger's primary audience doesn't include stock traders -- or if it does, it appears they've learned to ignore him.
Crutsinger appears to be more interested in making sure that the average news consumer has no reason to feel good about the country's current economic situation. The scare words in this paragraph from an updated version of his report done later this afternoon would support that contention:
Consumers are getting hammered by a relentless surge in energy costs, pushing gasoline above $4 per gallon. The rising food prices partly reflect higher costs for transporting products to grocery stores.
Readers are left to wonder how those poor, "hammered" consumers managed to send monthly retail sales to its best performance in six months, as the Census Bureau reported yesterday. And no, it wasn't the stimulus checks, because April and March retail sales, which predated all but a relative trickle of the issued stimulus checks, were both revised significantly upward into positive territory.
Here's something else you won't see Crutsinger or anyone else at AP report until they absolutely have to. Reacting to yesterday's retail sales report, Briefing.com predicted that economic growth in the second quarter might actually be half-decent:
Retail Sales are Flat-Out Strong.....
Coupled with the strong May same-store sales gains for retailers, these data should convincingly show that the fiscal stimulus and regular spending trends are not being completely destroyed by higher gas prices.
It is likely that consumer spending in June and July will also post good gains. The good trend on consumer spending as the second quarter begins greatly reduces the risk of a very weak second quarter real GDP gain. It is likely that forecasts will start to climb to the 1.5% to 2% range.
These data are clearly strong.
The mini-rally in the stock market in the past two days would appear to partially confirm the accuracy of the Briefing.com item.
If that turns out to be the case, as appears plausible, there will be wailing and gnashing of teeth on the part of the recession-obsessed media.
Cross-posted at BizzyBlog.com.