There were two pieces of significant economy-related news today. The first was that the Conference Board's index of leading economic indicators increased for the fifth straight month, this time by 0.3 percent, while May's increase was revised up to 0.7 percent. The second was that the University of Michigan's preliminary June reading on consumer confidence came in at 81.3, a decline from May. Both results trailed expectations.
Predictably, the Associated Press's Martin Crutsinger put a smiley face on the news, believing it shows that "that economic growth should accelerate in the second half of this year," while Bloomberg News's Nina Glinski was more sanguine, interpreting the confidence report as an indication that "Americans’ outlook for the economy dimmed." Excerpts from both efforts follow the jump.
Late this afternoon, I went to the Top Business Headlines page at the Associated Press's national web site to get today's new home construction news. Because the AP didn't have a story there (saved here for future reference), I knew it had to be bad, especially because to ignore it, the wire service made room in its Top 10 stories for an item on Toyota experimenting with fuel cells and aircraft orders at an air show in England.
The Census Bureau reported that seasonally adjusted housing starts fell by 9.3 percent in June after declining 7.3 percent in May. Seasonally adjusted applications for new building permits declined by 4.2 percent after a 5.1 percent revised May drop. Reporter Martin Crutsinger, doing his utmost to earn the "Worst Economics Writer" tag the National Review's Kevin Williamson conferred on him last year, blamed the weather, blamed "the South" without telling readers how the Census Bureau defines it, and ignored how, even after a very bad month, that region is still outperforming other regions in new homebuilding. Excerpts follow the jump (bolds and numbered tags are mine):
Bloomberg’s Eric Roston attempted to keep a straight face while promoting a draft report for the United Nations. It said U.S. emissions would need to be “cut to one-tenth of current levels, per person, in less than 40 years.” Short of societal regression, it is unclear how that could be done.
“It’s perilous to say these things in the U.S., where a mere description of the scale of the climate challenge too often invites ridicule and dismissiveness. Americans are each responsible for about 18 tons of carbon dioxide a year. Taking that down 90 percent would mean a drop in emissions to what they were in about 1901 or 1902. Cue ridicule and dismissiveness,” Roston wrote.
At roughly 8 a.m. Eastern Time Tuesday morning, the wire service AFP (Agence France-Presse) had a story entitled "Fighting nears Baghdad as UN warns crisis 'life-threatening.'" AFP reported that "Militants pushed a weeklong offensive that has overrun swathes of Iraq to within 60 kilometres (37 miles) of Baghdad Tuesday." A Skynet video found at Gateway Pundit tells us that "ISIS Terrorists Surround Baghdad From Three Sides."
Meanwhile, as of 12:30 a.m. ET on Wednesday only one of the three Iraq-related stores (here, here and here) at the Associated Press refers — and even then only in a very late paragraph — to how ISIS (or ISIL, using AP's preferred acronym) "overran Mosul then stormed toward Baghdad."
There must have been a double delivery of Obama administration koolaid over at Bloomberg News this morning.
The business wire service, which ordinarily is slightly less imbalanced in its business and economics reporting than the Associated Press, somehow interpreted a 6.5 percent seasonally adjusted decline in housing starts during May and a nearly identical percentage drop in building permits — with both figures lower than May 2013 — as evidence that "the homebuilding industry stabilized after a first-quarter swoon." That's ridiculous. The first quarter was supposedly as bad as it was because of bad winter weather; so there should have been an overcompensating bounceback. It hasn't happened. Meanwhile, that second Bloomberg koolaid delivery must have been the one meant for AP, whose Josh Boak turned in a report noteworthy for its unusual sobriety (bolds are mine throughout this post):
Appearing on Thursday's MSNBC Andrea Mitchell Reports, Bloomberg News reporter Jeanne Cummings asserted that the highly controversial Bowe Bergdahl prisoner exchange – which an overwhelming majority of Americans feel has endangered the lives of U.S. soldiers – would have no negative political impact on Democrats in November's midterm elections. [Listen to the audio or watch the video after the jump]
Asked if the deal with the Taliban would affect the elections, Cummings declared: "Generally, no. It's a bipartisan reaction....I don't think this is going to last very long unless Congress comes up with better arguments than, 'We really hated the Rose Garden ceremony.' That compared to bringing a soldier back, for the American public, I don't think they weight together."
Far too many journalists in the Washington-Gotham axis believe that any criticism of President Barack Obama must have its roots in cynical right-wing political opportunism and nothing else. At Bloomberg News, in a dispatch time-stamped June 4 at midnight, reporters David Lerman and Kathleen Hunter regaled readers with how the "Taliban Release Gives Republicans Fuel Beyond Benghazi." Some Democrats' concerns about Obama's actions in the freeing of Bowe Bergdahl were already known, including substantive issues of national security. But the Bloomberg pair limited the scope of Obama's problem with Dems to notification, while contending that "the demands for more information have come mostly from Republicans, some of whom already have declared their opposition to a deal whose details have yet to be fully disclosed."
The left-leaning New York Daily News also didn't get the memo that any criticism of Obama can only come from the right.
What at times is worse than the Jurassic Press not covering something? The Jurassic Press covering something.
The all-encompassing government-Internet-power-grab that is Network Neutrality rarely gets outside-the-Tech-World media attention. But Thursday the Federal Communications Commission (FCC) voted in Democrat Party-line fashion to begin its process of imposing it. This was a big enough deal that it garnered over-the-weekend Big Media coverage from ABC (with a Bloomberg assist) and PBS (with a Washington Post assist).
This is not a serious question from the Democrats who wouldn’t call it “lowering the bar” to give race-baiting huckster Al Sharpton an hour each night on MSNBC to mangle the English language. He’s angry Sen. Scott has no challenger since he’s “so far to the right” that he’s upset the NAACP:
In a Friday afternoon dispatch issued in the wake of the government's jobs report earlier that day, Christopher Rugaber and Josh Boak at the Associated Press wrote that "most economists ... forecast a strong rebound in economic growth - to a 3.5 percent annual rate in the current April-June quarter. And growth should reach nearly 3 percent for the full year, up from 1.9 percent in 2013, they expect."
There are two problems with that prediction. The first lies in how strong the third and fourth quarters will have to be for the economy to get "nearly 3 percent" for the full year, given the tiny first-quarter annualized growth of 0.1 percent reported on Wednesday. The second and perhaps more crucial issue is that the full-year estimate significantly exceeds the "altered assessment" at the Fed concerning how fast it thinks the economy can grow without running the risk of igniting inflation.
General Electric CEO Jeffrey Immelt has made nice with President Barack Obama on several occasions. Among other things, he chaired the President's Council on Jobs and Competitiveness, which met a grand total of four times in 2011 and 2012 before it was unceremoniously allowed to expire a year later. He fully expected that his company would benefit from its involvement in green energy and its membership in the U.S. Climate Action Partnership. He also endeared himself to Team Obama by calling "other U.S. business leaders greedy and mean."
In more than a minor comeuppance, as well as the latest evidence that business-related news reflecting badly on the Obama administration almost never escapes the business pages and center-right blogs and outlets, Inmelt's company has seen its medical division hit hard by the onset of Obamacare. Portions of Bloomberg News's original April 17 report follow the jump.
March was going to be the month when new home sales in the U.S. would finally break out after several months of horrible weather. After all, everyone knew that this winter's snow, ice, and low temperatures were the only things holding the new home market back. Consensus predictions ahead of today's related report from the Census Bureau were in the range of 450,000 to 455,000 annualized sales.
Oops. New home sales dove to a seasonally adjusted annualized 384,000, a 14.5 percent decline from February, a slightly larger miss compared to expectations, and a whopping 13.3 percent lower than March 2013. Press reports on this result predictably brought on appearances of the U-word ("unexpectedly"), with at least one interesting twist.
Associated Press stories today on the quarterly earnings releases of Wells Fargo (unbylined) and JPMorgan Chase (by Steve Rothwell) essentially mocked the nearly continuous monthly stream of reports the wire service's economics writers, particularly Martin Crutsinger and Chris Rugaber, have generated about the "housing recovery" during at least the past year.
The Wells Fargo story disclosed that the nation's largest mortgage lender "funded $36 billion worth of mortgages in the first quarter, down sharply from $109 billion a year earlier." The following graphic from the bank's detailed financial report tells the full story:
When an unmistakable embarrassment to liberalism occurs, a standard establishment press fallback tactic is to accuse conservatives of some form of incivility — and if there really isn't one, to make up a story about it anyway.
That's exactly what Bloomberg Businsessweek's Paul M. Barrett did on Tuesday in covering the NRA's reaction to the arrest of California State Senator and ardent gun control advocate Leland Yee on gun trafficking charges. The story's headline claimed that the group did "a victory dance." Barrett's content claimed that it was "gloating" and "strained to veil its pleasure." In truth, the group was doing nothing of the sort — unless the speech police now believe that making any kind of obvious observation about a liberal's failure is inherently unfair:
On Friday, the government's Bureau of Labor Statistics reported that the economy created 175,000 seasonally adjusted jobs in February, with 162,000 of the additions occurring in the private sector.
That result exceeded expectations of roughly 150,000, and caused the business press to sing odes of high praise to an economy that was amazingly overcoming this year's difficult winter weather. Unfortunately, as readers will see after the jump, February's raw results demonstrate that it was all an illusion.
The news in two government reports on the economy today was not good. One showed that initial unemployment claims last week rose to a seasonally adjusted 348,000; raw (not seasonally adjusted) claims were virtually identical to last year's comparable week. To avoid the dreaded U-word ("unexpectedly"), a pair of Bloomberg News reporters described the result as "exceeding all forecasts." In the other report, durable goods orders in January fell by a seasonally adjusted 1.0 percent, while December's steep decline of 4.3 percent was revised down even further to -5.3 percent.
In separate reports at the Associated Press, aka the Administration's Press, Christopher Rugaber and Josh Boak did their best to excuse away the results and to find something positive to say. As readers will see, they had to dig pretty deep, and their efforts were unconvincing.
According to a USA Today item carried at ABC News, "Sixty percent of adults can't drink milk." In July 2012, the New York Times ran an item entitled, "Got Milk? You Don't Need It." But the last time I checked, everyone uses electricity to some extent.
I'm bringing up these points because, as a friend showed me earlier today, the establishment press has run stories galore in the past several weeks about increases in the price of milk, but, as I noted a couple of days ago, has paid virtually no attention to coming increases in wholesale electricity costs of up to 80% which are due solely to Environmental Protection Agency regulations requiring the use of unproven and not commercially available "carbon capture" technology.
You might think that journalists would consider the prospect of sharply rising electricity costs in a nation blanketed by an extraordinarily cold, snowy winter and buffeted by its accompanying high utility bills hugely newsworthy.
You would be wrong. Searches on the last name of Julio Friedmann, the deputy assistant secretary of the Energy Department who testified at a congressional hearing on energy costs and technology last week, return very few results (here and here), none from a major general circulation establishment press outlet. One business-oriented outlet, Bloomberg BusinessWeek, covered Friedmann's testimony on the impact of the EPA's new "carbon capture" rules. In doing so, reporter Mark Drajem included some incoherence and misdirection (bolds are mine):
NOTE: Go to the end of this post to see my reaction to an email NB received from OpenSecrets.org.
The web site OpenSecrets.org has done a great deal of useful work. Especially helpful are its lists of high-dollar political campaign donor organizations.
The web site's 1989-2014 and 2012-specific lists, to name just two, demonstrate that the hyperventilating on the left and in the establishment press about the eeeevil Koch Brothers is completely out of line:
One of the more annoying aspects of business press reporting is its participants' singular focus on seasonally adjusted data to the exclusion of the underlying figures.
Many reports on the economy at least tag the figures reported as seasonally adjusted; but there seems to be a trend away from doing even that. For example, the Associated Press has routinely labeled weekly initial jobless claims as seasonally adjusted (examples from about a year ago are here, here, and here), but Thursday's adjusted claims figure of 331,000 and the 348,000 from a week earlier went unlabeled (as seen here and here, respectively). Additionally, none of the three main wire services (AP, Bloomberg, Reuters) described yesterday's reported increase in employment as "seasonally adjusted" (though the AP's Christopher Rugaber did report that the unemployment rate of 6.6 percent was seasonally adjusted). In failing to do so, they all were in essence telling readers that the economy really added 113,000 jobs in January. The truth is that it lost over 2.8 million of them:
After opening the day at about the same level as Friday's close, the three major U.S. stock indices fell by over 2 percent Monday (DJIA, -2.08%; S&P 500, -2.28%; NASDAQ, -2.61%).
About half of the rout took place in the first 30 minutes after the 10:00 a.m. release of two reports, one on manufacturing activity and the other on construction spending. The former, from the Institute for Supply Management, showed that its January Manufacturing Index came in at a mildly expansive 51.3% (any reading over 50% indicates expansion), down by over 5 percentage points from December and missing expectations by 4.7 points. The latter, from the Census Bureau, showed that seasonally adjusted construction activity barely budged in December. The market's decline continued throughout the rest of the day as disappointing news on January car sales rolled in. As will be seen after the jump, inclement January weather got a disproportionate share of the blame in the business press for these really weak results — an explanation which clearly didn't impress the markets.
The Associated Press, Bloomberg and Reuters all focused on the supposedly positive news of increased consumption reported in today's "Personal Income and Outlays" release from the government's Bureau of Economic Analysis. In the process, two of the three ignored a particulary dreadful statistic about disposable income, while the third (Bloomberg) misinterpreted its meaning.
The dire statistic is the year-over-year comparison of monthly disposable income, which took a deep dive in December, turning in the worst year-over year performance as seen here, in 40 years:
There was another appearance of the dreaded U-word ("unexpectedly") this morning at Bloomberg News.
The Commerce Department's advance report on December durable goods orders and shipments showed a seasonally adjusted 4.3 percent decrease in orders from November, while November was revised down from a positive 3.4 percent to 2.6 percent. Economists' median prediction for December was for a 1.8 percent increase. Bloomberg's Victoria Stilwell had an excuse at the ready, and as will be seen, chose to use it even though she knew it was a stretch (bolds are mine throughout this post):
Following up on Friday's awful jobs report from the government (only 74,000 seasonally adjusted jobs added, with the unemployment rate dropping to 6.7 percent only because adults continued to leave the workforce), the Asssociated Press's Christopher Rugaber tried to search for excuses.
To its credit, the headline at Rugaber's report didn't blatantly dissemble like the one at Bloomberg, which, in revising the title of an underrated Stevie Wonder song from the 1970s ("Blame It on the Sun"), blamed it on the cold and snow: "Old Man Winter Put a Chill on U.S. Labor Market at End of 2013." But the AP reporter predictably failed to entertain the possibility that Obamacare's virtual chaos, plan cancellations, and impending 2014 premium hikes might have thrown a great deal of sand into the job market's gears, even though a virtual halt in healthcare hiring stuck out like a sore thumb. Excerpts follow the jump (bolds and numbered tags are mine):
Discouraging headlines are appearing about the deterioration of the situation in Iraq, the war U.S. troops won in 2008. Bloomberg News notes, "Al-Qaeda Fighters Take Fallujah as Iraqi Army Attacks." The Washington Post reports that an "Al-Qaeda force captures Fallujah amid rise in violence in Iraq."
At the Associated Press, aka the Administration's Press, the headline writers are apparently more interested in making sure that as few readers as possible take an interest in the story, based on the non-descriptive headline they have chosen to employ:
Bloomberg Businessweek and others are trying to capitalize on the difficulties United Parcel Service and to a lesser extent Fedex had in delivering packages in time for Christmas to claim that the U.S. Postal Service is coming out of it smelling like a rose ("An Unlikely Star of the Holiday-Shipping Season: The U.S. Postal Service").
Not so fast, people. Let's be extremely generous and take it as a given that the Post Office didn't have any late arrivals, and that it deserves props for delivering 75,000 packages on Christmas Day. It's hard to make an apples-to-apples comparison, but based on the quoted number of packages UPS planned to deliver on Christmas Eve, the private company's package volume, particularly its air package volume, dwarfs that of the Post Office, and would overwhelm it if it tried to pull off what UPS routinely does:
Bringing on yet another appearance of the dreaded "U-word" — "unexpectedly" (via Bloomberg) — the Labor Department reported today that initial claims for unemployment benefits rose to a seasonally adjusted 379,000. That's a nine-month high, and an increase from last week's also unexpected 369,000. This week's and last week's results were far above the 332,000 and 320,000, respectively, analysts had predicted.
The Department of Labor's excuse for the past two dismal weeks has been "holiday volatility." Though they mostly had a point last week, this week they don't. Last week was the week after Thanksgiving, while that holiday took place six days earlier in 2012. But the week ended December 14, 2013 and the comparable week from last year (12/15/12) are both sufficiently removed from Thanksgiving's influence on the numbers that the holiday has no meaningful impact. The business press is pretending that DOL is right.
In mid-November, Americans for Tax Reform compiled a list of federal spending on state Obamacare exchanges totaling a breathtaking $4.5 billion.
One number on the list stands out from the rest — and it's not California's, though its $910 million amout is awful, disproportionate, and surely highly wasteful (before considering scalability concerns, the fixed costs of building a web site should be close to the same regardless of a state's population). The big eye-catcher is tiny Vermont's staggering $208 million. The nation's second-least populous state (626,000 as of 2012) has 0.2 percent of the U.S. population, but has received 4.6 percent of grants from the Center for Medicare and Medicaid Services. Though the Green Mountain State's enrollment numbers have been among the country's least embarrassing on percentage of the population, its exchange's rollout has in many ways been as bad, if not worse, than HealthCare.gov's, according to a December 10 Vermont Public Radio report which has garnered very little attention (HT Megan McArdle at Bloomberg News; bolds are mine):
On November 19, Henry Chao, deputy chief information officer at the Centers for Medicare and Medicaid Services, told a congressional committee that "[W]e still have to build the payment systems to make payments to issuers in January" for those who have enrolled in plans through HealthCare.gov.
On Black Friday, while almost no one was paying attention, Alex Nussbaum at Bloomberg News reported that "The administration is setting up a temporary process ... (in which) insurers will estimate what they are owed rather than have the government calculate the bill." Somehow, they'll settle up (or "true up") at the detailed level later. Tuesday evening, Roberta Rampton and Caroline Humer at Reuters covered this development. The Reuters item, which went live about an hour before Megyn Kelly's broadcast last night, moved the Fox News host to treat it as her lead story.