Here are Three Things to Remember about The Government's Monthly Employment Reports:
First, the initial report for the current month by the Bureaus of Labor Statistics (BLS) has usually contained significant upward revisions to previous months, as shown here:
For the past seven months, the number reported for jobs added in the current month has been, on average, less than 2/3 of the total reported increase in jobs, because of significant revisions to prior months.
Second, as you would expect because of the first point, the current month's initially reported total has usually been revised upward quite a bit in subsequent months:
The 2006 Real (after Inflation) Increase in Household Net Worth Was Greater Than 2005's -- But You Wouldn't Know That from Reading the Associated Press's Accounts. And this is not the first time AP has ignored what's "real."
Net Worth of U.S. Households Skyrockets in Final Quarter of 2006
The net worth of U.S. households climbed to a record high in the final quarter of last year, boosted mostly by gains on stocks, the Federal Reserve reported Thursday.
Net worth — the difference between households' total assets, such as houses and bank accounts, and their total liabilities, such as mortgages and credit card debt, totaled $55.6 trillion in the October-to-December quarter.
That marked a 2.5 percent growth rate from the third quarter, the previous quarterly record high. Stocks gains helped fuel the increase in net worth, although real-estate gains played a role, too.
For all of last year, households' net worth rose by 7.4 percent, a slower pace than the 7.9 percent increase registered in 2005.
AP made 2006 look worse than 2005, when 2006 was better. "Really."
NBC had some "horror stories" to share with its audience on March 7, according to "Nightly News" anchor Campbell Brown. Brown introduced the report by Lisa Myers that told the story of Wesley Wannemacher, a man who's $3,200 credit card debt ballooned to $10,700 after interest and penalties.
Wannemacher's plight also featured prominently in similar segments on ABC "World News with Charles Gibson" and CBS "Evening News" for the same day. [continued after jump]
With the Democrats now in charge of Congress the media is joining them in bringing back some favorite of their favorite boogeymen and on this morning's Today show that boogeyman took the form of the credit card companies and their "abusive" practices. Teasing a Lisa Myers report NBC's Ann Curry charged that credit card companies are "...accused of making it difficult for the average person to pay off that bill. We're gonna show you some of the tactics they allegedly use to keep the dollars flowing in." To which Today host Meredith Vieira piped in: "It's pretty awful."
Throughout the segment the credit card companies were portrayed in almost loan shark terms that had them taking "advantage" of unwitting customers. In her report NBC's Lisa Myers told the story of mild-mannered Charlie Bassham's struggle against the credit card companies and then brought on Democratic Senator Carl Levin as the proverbial hero to the all the Charlie Bassham's across America.
That's essentially the tone of a March 5 Los Angeles Times article* that took Democrats to task for their plans for what President Clinton was fond of calling "targeted tax cuts." Apparently they just "cost" the government too much of our money:
WASHINGTON // After years of claiming that Republicans were cluttering
the tax code with provisions that enriched the wealthy, leading Democrats in Congress want to add more tax credits and deductions to benefit narrow groups of largely middle-class constituents.
Among potential beneficiaries: people with elderly parents in nursing homes, new parents, college students, volunteer firefighters and organ donors.
But all these goodies are raising questions about how the Democrats can give away tax revenues while keeping their pledge not to deepen the government's deficit.
"Well you know I wish I had better news, but the numbers this week were just horrific," said CNN correspondent Gerri Willis.
The numbers she referred to were home prices and new-home sales, which were down. After briefly mentioning the increase in existing-home sales (which make up a larger share of the housing market), Willis dismissed it.
With the help of CNN's Allen Wastler, the duo played up fears of recession on the March 3 program.
Wastler and Willis wrapped up the housing segment playing on viewers’ fears of a recession after an up-and-down week on Wall Street. Willis said the question wasn’t simply what happens in the housing market, but in the overall economy.
“The conversation about recession this week isn’t just bad for the stock markets; it’s also bad for housing,” Willis said. “When people lose their jobs, we know what happens.” You can read the Business & Media Institute article here.
It's a good thing I wasn't sipping my coffee when I saw this on the front page of the Baltimore Sun in Starbucks this afternoon.
"Checks, balances rule Md. capital: Democratic leaders split on key issues, how to raise money."
Reporter Andrew Green began his March 5 article by conceding that "in ways large and small, Annapolis is showing signs of a leftward tilt" ever since Gov. Martin O'Malley took the helm on the second floor of the State House. But relax, Green continued, competing egos in the state government ensure that the legislative track isn't laden with runaway trains.
Maybe so, but all the freight the Maryland General Assembly is steaming into the station is filled with liberal goodies:
"As many political observers see it, [Virginia House of Delegates Speaker William] Howell is maturing into the leadership role he took on four years ago," wrote The Washington Post's Tim Craig in today's paper. And what exactly is developing the Republican speaker into an upstanding young chap?
Nothing more than a newfound willingness to raise taxes in the Old Dominion.
Here's the first two paragraphs of Craig's Metro section front pager:
Plugging her monthly "Color of Money Book Club" entry today, Washington Post finance columnist Michelle Singletary made a gratuitious reference to Al Gore, comparing consumer debt to global warming:
James D. Scurlock, author and director of "Maxed Out," hopes to do with the overselling of credit what former vice president Al Gore has done for global warming -- elevate people's consciousness about a terrible threat to our existence. In this case, it's our financial well-being.
According to the Times, the most recent four-month period, boxed in red below, represents a manufacturing recession; The Times has already declared it ("For Manufacturing, a Recession Has Arrived"; link may require registration):
But the following periods boxed in orange from 1995-2000 did not:
Two reports from earlier this week, one that warned of a "likely recession," and another that flat-out declared a non-existent "manufacturing recession," have to make you wonder, especially considering a positive report from the real world that came out earlier today.
Second -- On Tuesday evening, the New York Times (may require registration), in an article by David Leonhardt, declared:
For Manufacturing, a Recession Has Arrived
The nation’s manufacturing sector managed to slip into a recession with almost nobody seeming to notice. Well, until yesterday.
Wall Street was caught off guard when the Commerce Department reported yesterday morning that orders for durable goods — big items like home computers and factory machines — plunged almost 8 percent last month. That’s a big number, but it really shouldn’t have come as too much of a surprise. In two of the last three months, the manufacturing sector has shrunk, according to surveys by the Institute for Supply Management that have been out for weeks.
It sure looks as if Leonhardt was engaging in wishful thinking:
Last night, "Nightly News" and "Evening News" chose to inject a negative reference to the housing market into economy stories following Tuesday's stock market drop to make it look worse to viewers.
Both programs mentioned the 16.6 percent decrease in new home sales for January calling it the biggest drop in 13 years. But both networks also left out positive data for the same month available from the National Association of Realtors.
NBC reporter Carl Quintanilla even provided viewers with what he termed a "nightmare scenario: that home values plummet, more Americans default on their mortgages and stop spending."
The entire Business & Media Institute story can be found here.
On Wednesday's CBS Evening News, anchor Katie Couric highlighted how “according to a new government report out today” the problem of homelessness “is worse than we knew. On any given day, as many as 754,000 people in this country are homeless. As Cynthia Bowers tells us, one-third of the homeless are families with children." As viewers saw a mother with two kids, and with “Faces of Despair” on screen, Bowers framed the story in the most empathetic way, “This may be the most heartbreaking face of today's findings: the homeless children in America. Like six-month-old Mariah, or one-year-old Erin, innocent victims caught up in their parents' problems.”
Though the report, from the Department of Housing and Urban Development (HUD), found that two-thirds of the homeless are men, Bowers focused on the minority, asking the mother: “What would you say to Americans who think the stereotypical homeless person is a guy on the streets with a bottle in his hands?” The woman ludicrously responded: “Most Americans are just a paycheck away from being on the streets or being in a shelter like this.” Bowers proceeded to relay how the report “suggests there are 300,000 more homeless people than beds in shelters and transitional housing, more than three-quarters of a million on any given night,” which is, Bowers helpfully illustrated, “nearly the population of South Dakota.”
MRC's Business & Media Institute director Dan Gainor appeared on "Your World with Neil Cavuto" earlier to talk about the way the media covered yesterday's stock market slide.
"CBS, which always ends up being the worst in all of our studies for covering the economy, took a 3 percent drop and turned it into a disastrous, uh -- made it look like it's, you know, the end of the world," Gainor told Fox News Channel viewers.
As for any good economic news, "they buried it in the middle of a report" and then compared it to the two biggest stock losses in history, Gainor continued.
I subscribe to e-mailed breaking news alerts from both Fox News and CNN. Out of curiosity today, I reviewed the news alerts about the market's performance from yesterday's precipitous drop and today's rally.
I found that yesterday Fox issued two alerts to CNN's one. Today, Fox sent an e-mail update about the market's 50-point gain for the day. No such e-mail was issued from CNN, however.
I took the liberty to lift the text from the updates. Here they are in chronological order from earliest to latest:
Fox News breaking news update | 2/27/2007, 15:07 EST
DOW INDUSTRIALS FALL MORE THAN 500 POINTS ON FEARS OF ECONOMIC SLOWDOWN IN U.S., CHINA AND EUROPE
CNN Breaking News | 2/27/2007, 16:05 EST
-- The Dow sees its biggest
one-day drop in 3 years, ending about 400 points lower after plummeting
more than 500 points earlier in the day. More soon.
Here's a headline sure to spook any investor or economist: "Greenspan warns of likely U.S. recession." That was the headline right near the top of the widely surfed Drudge Report yesterday afternoon and this morning, referring to a speech that former Federal Reserve Chairman Alan Greenspan made the other day via satellite to a business conference in Hong Kong. Many market watchers are blaming those comments– along with a weak durable goods report and the plunge in the Chinese stock market – for today's stock market sell-off. But despite the inflammatory Drudge headline – which, in all fairness, linked to an Associated Press story with that same title – the Maestro was hardly so definitive as Drudge made him out to be. Here is what Greenspan said, according to AP:
In November 2000, during the disputed presidential election won by George W. Bush (excuse the indulgence; I just enjoy typing those words, especially considering the alternative), Dick Cheney and others were (in hindsight, rightfully) pointing to negative indicators in the economy pointing to a possible recession. Furious supporters of what was to become the previous administration accused Cheney of "talking down the economy" -- a charge that was lapped up by the Mainstream Media at the time.
It was nonsense, of course. But if you really believe that a soon-to-be-Vice President can "talk down the economy," a former Federal Reserve Chairman, Mr. "Irrational Exuberance" himself, who may still have at least informal access to information many of us don't, can be fairly accused of the same thing -- can't he?
My colleague Paul Detrick regularly monitors public radio and when doing so today he caught this gem from American Public Media's (APM) Marxist Place, er, "Marketplace" program.
A new study finds that high taxes and good healt go together. Researchers say states with higher taxes spend more money on social programs which ultimately leads to healthier kids.
Turns out APM didn't tell listeners about the political donations of the study's liberal author, nor turn to conservative health care experts for criticism or to offer market-oriented solutions to covering more children with health insurance.
If you make more money than I do is that anyone’s problem?
The news media made a big deal out of “income inequality” especially “out of control” CEO pay as NBC’s Carl Quintanilla called it on Oct. 20, 2006 during the “Today” show. Robin Roberts took aim at the same topic: “Now to the golden parachute that has a lot of people seeing red,” during “Good Morning America” on January 4.
But the reports on the income gap missed two alternative perspectives from economists: that the widening income gap is an illusion and that in either case the gap really doesn’t matter. Read the full Business & Media Institute report here.
This came in my e-mail from CNN just after the markets closed on Wednesday:
Historic day on Wall Street. Dow industrial, transportation and utility averages all hit record highs for 1st time since 1998.
I've been pretty busy, but I think I would have caught coverage of this news somewhere else had it occurred. If it did, it was quite muted.
Mark Hulbert, in a column time-stamped early Friday morning, details just how significant the news is:
The last time prior to Wednesday that this happened was March 17, 1998, nearly nine years ago. During the previous 70 years prior to 1998 in which all three Dow averages existed, it happened just 18 times.
If the most bullish thing that a bull market can do is go up, Wednesday was evidence of a very powerful bull market, indeed.
File this one under "MSM condemns ee-vil corporations." As you'll note from the screencap, ABC's Good Morning America today branded State Farm Insurance "not a good neighbor." What is State Farm's sin? Its decision not to write new homeowners and commercial policies in the state of Mississippi.
Did you note that? State Farm has decided not to write any new policies. This in no way affects the insurer's liability for existing policies. State Farm has made a simple business decision: given the legal environment there, Mississippi is not a good place for an insurer like it do to business.
"Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's 'current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market.'"
That didn't stop Diane Sawyer from introducing a segment on the news by speaking of "outrage" over insurance companies and declaring that "some" call State Farm's decision "heartless and others call it plain greedy."
Despite his natural aptitude for rapping, Velshi will probably keep his day job, in which he earns well above minimum wage to spoon-feed bad economic theory to breakfast hour viewers. For instance, did you know government could grow the economy by mandating a higher minimum wage?
On Monday’s "Evening News" on CBS, anchor Katie Couric asserted a common talking point among feminists and that is that women make 76 cents for every dollar a man does, which is a misleading statistic. In a series entitled "The American Spirit," Couric profiled Janet Hanson, the founder of a women’s networking group called 85 Broads, which is dedicated to helping women get ahead, as Hanson doesn't seem to believe a woman can make it on her own:
Katie Couric: "Women earn only 76 cents for every dollar a man earns, and that really hasn’t changed much over the last 30 years. Why?"
Janet Hanson: "Women have to learn how to become better negotiators for themselves, which is hard to do. So they need to see other women doing that successfully, and the whole mission behind this network is that women cannot succeed if they don’t leverage each other’s intellectual firepower."
Yet, an article on CNN Money, written by a woman, argues why the 76 cent statistic is misleading:
The media can't really deny the economy is doing great. But all good things come to an end,so what the heck, why not float the prospect of a looming recession? That's essentially what The New York Times did in today's paper.
Staff writers Eduardo Porter and Jeremy W. Peters turned to a Clinton economic adviser to suggest that the current economy is driven by a housing bubble similar to the tech bubble that drove the smokin' hot economy of the late 1990s.
“In both situations we had overinvestment, now in housing, then in fiber optics,” the Times reporters quoted Joseph E. Stiglitz, Clinton’s "chief economic adviser from 1995 to 1997."
[I guess those silly 2001 and 2003 tax cuts that have resulted in record tax receipts from a growing economy and its resultant jobs growth have nothing to do with it.]
Porter and Peters persisted in peddling a discredited media meme: it's the housing "bubble" driving the economy, but in fact:
U.S. Tax Revenues Up 9.7% Through Four Months, Deficit Down 57%; U.S. Media Outlets Mostly Ignore the News
There's a good chance you didn't hear about this (original US Treasury report is here):
Both Brian Wesbury at FT Portfolios and yours truly have to confess to being wrong so far this year on revenue growth. We both have been thinking (Wesbury here, BizzyBlog here) that it’s going to come in at 9%, but as you see, through four months it’s actually pushing 10%.
A few days old but a goodie. I've seen in this one report something that's often missing from network treatment of the minimum wage issue: a quantification of how much the government wage mandate affects the bottom line for small businesses, and ends up screwing over the little guy.
Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has
employed more than 2,000 high school students since 1990. But he plans
to lay off three teenage workers and decrease hours worked by others.
Of his 25-person workforce, roughly 75 percent are in high school.
"I've had to go to some of my kids and say, 'Look, my payroll just
increased 13 percent,' " he said. " 'Sorry, I don't have any hours for
Messner's monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high.
"We go to great lengths to hang on to our high school workers, but
there are a lot of kids who come in and get one check in their pocket
and feel like they're living large and out the door they go," he said.
"We never get our return on investment when that happens."
This week, Chris Matthews' anti-Bush bigotry spilled over into a profanity laden rant. The "Hardball" host dropped the F-bomb during a live interview with Don Imus.
Meanwhile, CNN’s Paula Zahn connected opposition of illegal immigration to, you guessed it, the Ku Klux Klan. This is the same network, however, that tried to downplay proven religious bigotry by a blogger for the John Edwards campaign.
Over on ABC, "Good Morning America" anchor Diane Sawyer spent the week in Syria. She let the despotism of President Bashar Assad go mostly unchallenged.
During other segments, Sawyer chose to ask him about video games and whether he uses an iPod.
While the media fawn over despots like Syria’s Bashar al-Assad and Venezuela’s Hugo Chavez, they rarely report on the horrors of life for most under such rule. With that in mind, it seems safe to assume that a current meat and sugar shortage in Venezuela that appears to be caused by government price controls is likely to go mostly unnoticed.
As reported by the Associated Press (emphasis mine throughout):
President Hugo Chavez's administration blames the food supply problems on unscrupulous speculators, but industry officials say government price controls that strangle profits are responsible. Authorities on Wednesday raided a warehouse in Caracas and seized seven tons of sugar hoarded by vendors unwilling to market the inventory at the official price.
Hmmm. Price controls and government intervention in the free market causes shortages and hyperinflation. You don’t expect to see that reported on the broadcast network news programs tonight, do you? Regardless, the article continued:
On Wednesday, Ralph Nader continued his media adulation tour, this time stopping by "The Daily Show." Just as with his appearance on "Late Edition," the only tough questioning Nader received was on the issue of the 2000 election and whether he placed George Bush in the White House. Stewart once again made clear exactly why conservatives view him as a not a political humorist, but a partisan, liberal comic. At one point, he told the consumer advocate that he was always right. And when Nader attacked President Ronald Reagan, the Comedy Central host joined right in:
Jon Stewart: "Please welcome back to the program, Ralph Nader! Ralph! Come on! Nice to see you again. Thanks for joining us. So they say they’re going to make a film about you, ‘An Unreasonable Man,’ and they come to you, and you say, ‘I'm in.’"
Ralph Nader: "What are you going to do? ( Laughter ) Everything– You know, you want air bags in cars and seat belts in cars so you lose the freedom to go through a windshield. Reagan didn't like that. He liked the freedom to go through a windshield."
Stewart:: "Exactly. So he was considering you an anti-liberty–."
Nader: "Yeah. Right."
Stewart: "Exactly. Ralph Nader. Tear down that belt. That sort of thing?"