Regardless of economic data, press accounts are typically negative and pessimistic.
The economy has been growing at a very strong clip since October 2001. Real estate prices are at their highest levels in history, as are homeownership and Americans’ average net worth. Unemployment also is lower than the average during any of the past three decades. Yet Americans are very down, and one third even think the economy is in a recession. Is consistently negative media coverage influencing public attitudes? Might headlines like “Job growth less than expected” and “Jobs come up weak” have something to do with the gloom being felt across the country?
The Labor Department announced unemployment numbers for October on November 4, and despite a decline in this rate and an addition to payrolls, the media reported the gains as “surprisingly meager,” “stalled,” “damped,” and “disappointing.”
As measured by the gross domestic product, the economy has now grown by 3 percent or more for 10 straight quarters – a feat that hasn't been achieved since the mid-’80s and never occurred during the “boom” years of the ’90s. The unemployment rate now stands at 5 percent.
But consumer confidence as measured by the Conference Board, a non-profit economic research and forecasting organization, is at 85, its lowest reading since October 2003 when unemployment was 20 percent higher than it is today. At the same time, according to Scott Rasmussen of Rasmussen Reports, "34 percent believe the U.S. is in a recession." And, a recent ABC News/Washington Post poll stated that 61 percent of Americans disapprove of the way President Bush is handling the economy.
Regardless of what economic data is released by the various government agencies responsible for such things, the media tend to report it as bad news. When the press make pessimistic predictions that don’t pan out, rarely will they revisit them or explain why they were wrong. And when data is reported that is better than expected, the press will often downplay it by suggesting that the numbers are preliminary but could be revised lower later. When such revisions actually improve the picture originally depicted, this too is largely ignored. Some examples from coverage of the latest jobs numbers:
- “Job growth was surprisingly meager last month, the Labor Department reported yesterday, in a sign that business executives have become worried that the economic damage from high energy prices might be growing.” The New York Times
- “U.S. job growth stalled last month, the Labor Department reported yesterday, suggesting that employers remained cautious about hiring because of high energy prices.” The Washington Post
- “The nation's job market rebounded last month from hurricane-related losses, although the payroll gain was far below expectations as high energy prices may have damped hiring in regions not directly hit by the storms, the government reported Friday.” The Los Angeles Times
- “Job growth resumed in October but came in well below economists' forecasts, due to softness in the labor market nationwide, rather than disruptions from Hurricane Katrina.” CNN/Money
These same media outlets completely ignored their own gloomy and, as it turns out, faulty predictions made for the labor markets and the economy shortly after Katrina hit New Orleans. For example, as reported by The Free Market Project, the Los Angeles Times’ Joel Havemann wrote on September 3, 2005: “Katrina's effects — not only on the Gulf Coast regions where it struck but also on the national economy via higher energy prices and disrupted ports — could result in the loss of as many as 500,000 jobs.”
Nell Henderson of the Washington Post wrote the same day: “Hurricane Katrina, by forcing an exodus of workers and families from New Orleans and surrounding areas, appears likely to rank alongside Sept. 11, 2001, and the Arab oil embargo of 1973 as one of the nation's most serious and sudden economic shocks – particularly in terms of job losses – in recent memory.”
However, when the September unemployment report came in much better than the media had been forecasting – showing a loss of only 35,000 non-farm payroll jobs instead of the hundreds of thousands that were forecast – the press downplayed this number by stating that it was too early to tell just what the real impact of Katrina was. Here’s how CNN/Money categorized the September data: “Still, economists cautioned that it was premature to say damage to the job market from Katrina was minimal, noting it could take months to assess the full impact of the storm.”
Well, it’s now a month later, and the September report indeed was revised – for the better. Instead of what many predicted in the press, the Labor Department’s November 4 announcement showed that the nation lost only 8,000 non-farm payroll jobs in September as opposed to the 35,000 initially reported. Add to that 56,000 jobs created in October. Adjusting the October gains with the September losses, that means 48,000 new non-farm payroll positions have been added since Katrina and Rita devastated the Gulf Coast – instead of the hundreds of thousands that Americans were told by the media would be lost.
Nevertheless, Americans turned on their television sets the evening of November 4 to hear Brian Williams of NBC’s “Nightly News” state:
“Back here at home this busy Friday night, news on the economy and the job market, still struggling to recover from a brutal hurricane season. Employers boosted payrolls by just 56,000 last month. That's well short of what economists were forecasting.”
And, they opened their Saturday newspapers to learn why getting too large of a raise can actually be bad for them. As reported by the Associated Press’s Jeannine Aversa:
“A wage barometer that economists monitor for signs of inflation picked up strongly.
“Workers' average hourly earnings rose to $16.27 in October, up 0.5 percent from September. Wage gains are good for workers and can fuel spending, an important ingredient to the economy's good health. But a rapid pickup in wage growth can lead economists to fret about inflation.”
This is the largest monthly increase to average hourly wages since February 2003, and the AP and other media outlets depicted it as negative due to its inflationary potential. However, for several years the media have been reporting that the jobs being created in the current recovery are low-paying, and that as a result, wage gains are not keeping up with inflation. In fact, a Google search of the phrase “wages lagging inflation” produced 188,000 results.
Nicholas Riccardi of the Los Angeles Times wrote about this in April in an article entitled “Wages Lagging Behind Prices”:
“For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut.
“The growth in wages in 2004 and the first two months of this year trailed inflation, compounding the squeeze from higher housing, energy and other costs.”
As a result, after years of being told that they weren’t earning enough money to make ends meet, Americans are now being informed that receiving too much of a raise is also a bad thing. As such, it appears that whatever economic data is released, the media tend to report it as a cataclysm. Is it any wonder the public is so gloomy?