N.Y. Times Declares a 'Manufacturing Recession' -- But None Occurred In Late 1990s

Photo of Tom Blumer.
By Tom Blumer (Bio | Archive)
March 1, 2007 - 14:56 ET

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):

ISMpmi2006to2007

But the following periods boxed in orange from 1995-2000 did not:

ISMpmi1995to2000.jpg

Any questions?

___________________________

Source and Explanation: Historical Table of the Institute for Supply Management's Monthly PMI Manufacturing Index. Readings above 50 represent expansion. Those below 50 represent contraction. According to ISM (scroll down at link), "A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing."

Also: In a Proquest Library search of the Times for articles containing both "manufacturing" and "recession" from 1/1/1995 to 1/1/2001, I found no declarations that the manufacturing sector was actually in a recession -- only a few saying that it might get to that point.

Cross-posted at BizzyBlog.com.


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A recession in economics is &

March 1, 2007 - 16:01 ET by MikeB

A recession in economics is "a widespread decline in the GDP and employment and trade lasting from six months to a year." (dictionary.com).  Let's see if al_NYT's story meets the criteria.

2 quarters or more of widespread decline in GDP: nope, not there.  There is up and down variability, but not a decline of 2 quarters or longer.

Six months or more of widespread decline in employment: nope, not there.  Unemployment is hovering around 4.5 to 4.8%, which is still below the "natural rate" of unemployment, so we still have a defined full employment.

Six months or more of widespread decline in trade: doubtful.  I am a bit lazy today, so I won't search for data on imports and exports.  But, I'd be willing to bet that both categories are increasing (imports faster than exports, but both still increasing).

Apparently, the NYT subscribes to Galbraith's school of economics, the same Galbraith of whom Milton Friedman once said, "he has predicted 9 of the last 3 recessions."

"A communist is someone who reads Marx.  An anti-communist is someone who understands Marx."  Ronald Reagan

recession

March 1, 2007 - 17:42 ET by Tom Blumer

I may be wrong about this, but I think the media generally avoided using the word "recession" to describe a sector of the economy during the 1990s, because, as you noted, it should only be used to describe the ENTIRE economy. Yet we've been hearing about a "recession in housing" for months.

Now the Times wants to inappropriately hang a word on the manufacturing sector, and as today's news shows, it's not even in a state of contraction!

The Times apparently got tired of waiting for the "Bush recession" to happen and is just declaring it to be the case in manufacturing -- with absolutely no basis.

Good work, Tom.Keep doing thi

March 1, 2007 - 20:33 ET by Apostate_Fritter

Good work, Tom.

Keep doing this. Liberals are like little puppies - you have to keep rubbing their nose in the facts. You painted a clear-cut case for bias and hypocrisy.

I'm sure you realize that you will never convert a good 'ol liberal, but to some young person reading your article, seeing it painted so clearly and unambiguously could make a massive difference in attitude throughout their life.

Thanks! You cheer me up!

NYT

March 1, 2007 - 21:40 ET by Tom Blumer

Thanks for the nice words. They come in handy every once in a while. This is one of those days, for unrelated reasons. But ... you are are right about the potential influence, which is why it needs to be done by "somebody."

I'm a bit stunned that no one beyond myself and Don Luskin have said much about this -- but maybe the way to look at this positively is to say that's because almost no one outside of Manhattan takes anything the Times says about the economy seriously any more. So they can yammer away in relative anonymity. But you would think they'd be embarrassed by what they wrote, esp after the ISM report.

I'll betcha that Monday's non-manufacturing report from ISM is a good one too.

Mr. Blumer the difference is

March 1, 2007 - 18:55 ET by AtheistRepublican

Mr. Blumer the difference is obvious, Bill Clinton was the president during the earlier period and we all know the Clinton Era was full of economic progress, while the BUSH era is full of economic down fall. Your so called facts are irrelevant in the face of the larger TRUTH.

Clinton

March 1, 2007 - 19:41 ET by Tom Blumer

You don't say? (/kidding)

What a bunch of hacks.

March 1, 2007 - 21:38 ET by S P

What a bunch of hacks.

Recession? HArdly

March 1, 2007 - 21:50 ET by Six String Spiff

Thats funny.  The company I work for, which just so happens to rely heavily on it's manufacturing section, just increased it's profits by 20%.  Our customers love our Arc Trainer.. Product of the year for 3 years by NOVA 7......oops.  We can't make shit fast enough for our demand.  F*ckin NYT...

Sure, I watch the MSM...     Through a pair of crosshairs.

From a financial point of vie

March 1, 2007 - 22:15 ET by jdhawk

From a financial point of view, every day is a recession at the NYT!  For example, their stock price has been cut in half over the last several years.  Their long term debt has nearly doubled.  They posted nearly a negative $5.00 earnings per share in the last quarter of 2006.  Essentially wiping out profits for the last several years. 

If you are somebody at the NYT you are given a salary, stock options and restricted stock among other perks.  Over the last couple of years, stock options are below their issue price, in other words worthless and restricted stock is cashed in as soon as possible to avoid an ever lower stock price.

Meanwhile, the "newspaper" has cut back on staff and probably any of a number of things employees take for granted until they are taken away. 

Numerous times the NYT has been caught publishing a story that they did months before and treating it as if it is a brand new story.  And, of course, the transgression elucidated here is done multiple times a week if not a day.  And that is to simply leave out facts that anyone with an Internet connection, a computer and a search engine could lookup and verify. 

Its a shit sandwich NYT day after day after day . . .