Does the self-described "Nation's Newspaper" -- er, make that the nation's second newspaper -- have a MoveOn mole as a headline writer?
The paper's headline at its report on Thursday's government announcement that the nation's Gross Domestic Product (GDP) came in at an annualized 3.5% after four consecutive quarters of decline was not only over the top. Its message went directly against an admonishment by an economist quoted in Paul Davidson's underlying report, which was to not "get carried away by the really strong number."
Many commentators, while gratified that GDP growth occurred, have cautioned that the growth was influenced heavily by government programs that either have already run their course with debatable long-term impact (e.g., Cash for Clunkers), or are probably not going to last much longer even if extended (e.g., the first-time homebuyers' credit), simply because the government is running trillion-dollar annual deficits and can't afford them.
Get a load of the story's headline, and how it contrasts with Davidson's generally pretty good reporting (bold is mine):
Economy grew at torrid 3.5% rate in 3Q; stocks jump
News that the economy grew at a 3.5% pace in the third quarter, its best showing in two years, sent stocks soaring Thursday.
.... The growth in GDP, fueled by government-supported spending on cars and homes, was the strongest signal yet that the longest, deepest downturn since the Great Depression is ending.
But a second report out Thursday showed the number of people claiming jobless benefits for the first time dropped only slightly in the latest week, evidence that the labor market remains weak.
.... Many economists believe that while the recession that began in December 2007 is history, the third-quarter spurt was largely fueled by government incentives and industry trends that will fade, leaving a wobbly economy.
"Don't get carried away by the really strong number," says economist Patrick Newport of IHS Global Insight. "The economy is still losing jobs and it's still fundamentally weak in a lot of places."
.... Newport .... says (that) almost half the growth stemmed from a rise in consumer spending that was juiced by the government's expired cash-for-clunkers program, which ended in August.
"Torrid" was not a word that was frequently applied to the U.S. economy during the Bush presidency, even though several quarters came in above 4% as originally reported (the government has since done a comprehensive adjustment that reduced some of them to below 4%. This Google News Archive search on ["torrid GDP "economic growth"] (typed exactly as indicated between brackets) covering 2007, a year when both second- and third-quarter growth came in above 4% before that comprehensive adjustment, returns 61 results, with very few of them directly relating to the U.S. economy.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
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Comments Policy
I know it's customary to
October 31, 2009 - 23:10 ET by robert108I know it's customary to give the annualized figure, but after a year of shrinkage, the reality is that we had .875 growth in the third quarter, and that was comprised of spending by govt. The private sector, which pays all the bills for govt spending, is still shrinking, with no end in sight.
Since Obama has claimed that the recession was caused by healthcare costs, how is he going to spin this "recovery" when the healthcare industry remains unchanged? Is he going to admit that we really don't need to turn a productive and profitable part of our economy into a massively expensive welfare scheme?
Don't hold your breath. I think the claim of "the cost of healthcare caused the recession" will be flushed down the memory hole.
The thing that's annoying about it ....
October 31, 2009 - 23:18 ET by Tom Blumer.... is that politicians, newsreaders, and almost everyone else drops "annualized" from their press releases and reports, giving casual news consumers the impression that the figure is not annualized.
So you're right, the economy declined an actual 3.8% during the four previous quarters, and still has 2.9% to go before we're at where we were after 2Q08 -- and by that time, if it comes as hoped (which I doubt it will), our population will be 2% or so larger.
That should be: .875% growth
November 1, 2009 - 00:05 ET by robert108That should be: .875% growth in Q3 2009
That's what grew in the last quarter...
November 1, 2009 - 00:16 ET by P. AaronUSA-Today means that ; 'Torrid' love affair the press still has with the Democrats and the Obama's.
Obviously we need MORE government programs!
November 1, 2009 - 00:45 ET by MightyMouthDoes anyone know how we can get that done?
And voting "democrat" does not count... because "we" have already done that!
"The bureaucracy is growing to meet the needs of the growing bureaucracy"
These numbers are cooked
November 1, 2009 - 03:01 ET by richb313These numbers are cooked so bad that any News Paper should be embarressed to print them unchallenged. I believe that a systemic change to the way GDP is even calculated was adopted for this quarter. There is absolutley no way that a 3.5% growth in GDP is even possible with all the shut down or slowed down Industries involved in Automobile Manufacturing. When you combine that with slow housing starts that have only recently begun to increase slightly there are whole sectors of manufacturing that are still below even minimal levels.
What has happened is a reduction in inventory that will lead to some small growth in the 4th quarter above seasonal expectations. The 1st quarter growth will also be somewhat more positive due to replenishing shrinking inventories. Unless there is a sustained growth in consumer demand, which I have seen little evidence of so far, we can expect the 2nd and 3rd quarters of next year to either be flat or still head in a negative direction. Beyond the 3rd quarter I really cannot see. Too many differing senarios are possible due to various actions by Governmnet that could have drastic and immediate impacts.
One of the biggest actions that will show some positive numbers at first but actually lead to declining output would be if the Cap and Trade bill gets passed. Initially this will fuel investments on Wall Street as they will have new things to sell, however the increased costs of manufacture and distribution will also lead to less consumer demand. The resulting loss of demand due to higher costs will be a negative feedback on the economy and could result in moving the recession deeper and the duration longer.
These published numbers have little to do with reality but an argument could be made that positive numbers have a psychological impact that helps fuel a recovery. I believe however that this was not the motivation coming from this administration that looks at all issues of national imprtance first through the political lens. I am very skeptical of any numbers or statistics that are coming from Government during these increasingly hazardous times.
I dont trust any numbers
November 1, 2009 - 03:10 ET by Dan The Man 2I dont trust any numbers from this government, but thats probably what the other side said about President Bush admin. So the truth is what is real and what is not.
That is why
November 1, 2009 - 03:31 ET by richb313That is why I always try and do my own analysis of these important issues. I am wrong on occasion but usually because I did not consider a factor rather than over or underestimating them.
Astute commentator on NB blog makes piercing insight
November 1, 2009 - 08:12 ET by CO2MakerIn a remarkable analysis of the self-evidently flawed premises of the headline cited by NB contributing editor Tom Blumer, commentator CO2Maker pointed out that many news and opinion outlets are in the ubiquitous habit of adding dramatic adjectives (and adverbs, too) to their headlines and story leads. Most so-called neutral practitioners assert that the practice is a harmless way to draw readers or listeners to the story and to enliven the story's "narrative." But the same advocates of the "harmlessly loaded modifier" technique often point out the egregious use of the ploy by their philosophical opponents (e.g., Dan "TANG it all!" Rather or Katie C**TUS) but not by their philosophical kin (e.g., Sean Hannity).
This is an ancient practice, practiced by news readers and headliners since before the days of instant tape replays. And in broadcast news, it is augmented by the catchy device of two news personalities reading alternating parts of the one- or two-sentence "set-up" to the same story, and also by offering a faux-courtesy reply when the reporter of the remote report "hands it back" to the news anchor for what amounts to a pat on the head.
A splendid 'splanation by a conscientious commenter ....
November 1, 2009 - 10:00 ET by Tom Blumer.... back to you, CO2. :-->
3.5% economic growth my foot
November 1, 2009 - 08:29 ET by R D HelmThe revised number will be coming out at the end of the month or thereabouts.
If there was actual "growth" in this imploding economy, I am guessing it will be less than 0.5%, and due mainly to the expansion of government.
We are being fed a steaming pile of BS by the government and the media, and the green flies are beginning to gather.
The vultures aren't far behind.
-Dave
Our elected representatives have failed us.
growth by the foot
November 1, 2009 - 08:33 ET by AgnosticI'm guessing growth figures will come out to be 2.2-2.4. Reasoning - I have none but statistics from Washington being what they are it seems like 2.4 is a realistic reduction without sending a scare into the consumers.
When the statitician was asked, 'How do you think the numbers are going to turn out?'; he responded, "How do you want them to come out?'.
A person may be won over with logic and reason but the masses must be bought with spectacle and platitudes. - 2008 Elections
Anti Growth
November 1, 2009 - 10:51 ET by miss911ninjaSince BHO and his henchmen have no desire to restore a robust economy, they would have preferred to see the headline "Horrid Growth."