Oops: AP Says GDP Report Was Causing Stock Market Rise in AM, Quietly Cites It As Reason for Decline After Close
It seems that Associated Press Business Writer David K. Randall made a bad call yesterday. But he only has himself to blame for engaging in what he should have known was wishful thinking.
Shortly after the government's report on economic growth during the fourth quarter of 2010 came in with an annualized 3.2% reading, Randall put out this this short report:
Stocks edge up after stronger GDP report
Stocks are rising in early trading after a report showed that the U.S. economy is growing.
... The Dow Jones is up 7 points, or 0.1 percent, to 11,997 in morning trading. The S&P 500 is up 1, or 0.1 percent, to 1,300. The Nasdaq composite is flat at 2,755.
First, the report trailed expectations of 3.5%. Second, the "rising" Randall described -- 0.06%, on the Dow, 0.07% with the S&P 500, and nothing in the Nasdaq -- amounted to mere rounding errors.
By Friday's close, the markets were down significantly, at which point Randall, along with colleague Matthew Craft, had changed their tune. In a report that also cited the situation in Egypt and a number of disappointing earnings reports as contributors, the pair noted the following in their eighteenth and second-last paragraph:
A lower than expected report on the U.S. economy helped lead to a market sell-off as well. The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 3.2 percent between October and December. That was below the 3.5 percent that analysts had forecast.
In other words, "Oops."
If the Randall's and Craft's goal is to minimize the impact of the GDP disappointment in readers' minds, they could hardly have done a "better" job:
- Their story's headline ("World Markets Sink as Protests Escalate in Egypt") doesn't mention the GDP miss.
- Many if not most readers won't get to Paragraph 18.
- In what would appear to be an attempt to keep it from readers who might skip to the final paragraph after reading the first few, the GDP paragraph is inexplicably sandwiched in between items about specific companies.
- And of course, many outlets carrying the AP story didn't carry all of it, dropping later paragraphs (example here).
For the record, this fourth quarter of 2010 was the sixth full quarter after the recession as normal people define it and as the National Bureau of Economic Research defines it ended. Annualized GDP growth during the first quarter of 1984, the sixth post-recession quarter in the Reagan Era, was 8.0%.
Cross-posted at BizzyBlog.com.