GDP Soars and Unemployment Drops; CBS’s Lead: 'The Economy is Slowing Down'

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A week after ignoring the announcement of a roaring 5.3 percent GDP growth rate in the first quarter, and on the day unemployment fell a tenth of a point to 4.6 percent -- the lowest level since July of 2001 -- the CBS Evening News decided to lead Friday with how, as anchor Russ Mitchell put it: “There are new signs this evening that the economy is slowing down.” Reporter Anthony Mason asserted that “rising interest rates and rising gas prices are beginning to put the brakes on the U.S. economy." Mason laid out the bad news: "The newest numbers, just 75,000 jobs were added to the economy last month, well below forecasts. Manufacturing lost 14,000 jobs. But retail took the biggest hit, losing more than 27,000" and “the other hammer to the economy came from the once-booming construction sector. It came to a standstill in May.” Mason concluded with his own domino theory: "One major builder reported a nearly 30 percent drop in new orders for the past two months. Now that ripples right through the economy. Buying slows, then building slows, then hiring slows. And that, Russ, is why the economy is slowing."

On NBC, in contrast, Anne Thompson noted how “cuts on factory floors and at the country's retailers held back job gains for the second straight month,” but she characterized those as “signs analysts say of an economy that is slowing but not in trouble." Mark Zandi, chief economist at Moody's Economy.com, then emphasized how the economy “is throttling back from very rapid growth earlier in the year, but it is still a very strong economy, an economy that will perform well going forward." (Transcripts follow)

On the May 30 CBS Evening News, Jim Axelrod noted how despite “5.3 percent economic growth in the first quarter, 5.2 million more jobs since August 2003, or unemployment down to 4.7 percent,” a CBS News poll found that “just 34 percent approved of the President's handling of the economy.” A NewsBusters item pointed out how Axelrod’s citation of the 5.3 percent GDP growth in the first quarter, the fastest rate in two-and-a-half years, was the first on the CBS Evening News which ignored it when the number was announced last Thursday [May 25].”

ABC’s short item on the Friday, June 2 World News Tonight:

Anchor Terry Moran: "There was surprising news about the economy today. The government said that employers 75,000 jobs in May. That's nearly a hundred thousand fewer than expected. The unemployment dipped a bit to 4.6 percent, the lowest in five years, but analysts said the overall picture's one of economic growth slowing from the very fast pace earlier this year. Economists said that might convince the Federal Reserve to end, at least for now, its two-year campaign of raising interest rates.”

The start of the NBC Nightly News item, which did not lead the newscast:

Anchor Brian Williams announced: "A jobs report came out today that took some analysts by surprise. It showed just 75,000 jobs were added to the entire nation's payrolls last month. That's almost 100,000 fewer than economists were predicting. At the same time, the unemployment rate dropped by a tenth of a percentage to 4.6 percent. So what do these new numbers mean for the economy as a whole? An overall look tonight from NBC News chief financial correspondent Anne Thompson."

Anne Thompson: "Cuts on factory floors and at the country's retailers held back job gains for the second straight month -- signs analysts say of an economy that is slowing but not in trouble."

Mark Zandi, chief economist at Moody's Economy.com: "This is an economy that is throttling back from very rapid growth earlier in the year, but it is still a very strong economy, an economy that will perform well going forward."...

CBS Evening News. The tease from anchor Russ Mitchell:

“The unemployment rate falls but there are new signs this evening that the economy is heading for a slowdown. So we'll start with the latest economic news...”

Mitchell led:

“Good evening, Bob is off tonight. The U.S. economy was charging ahead at an annual rate of almost 5 percent [actually 5.3%] in the first quarter of this year. But now it appears we'll be lucky if it grows half that rapidly in this quarter. There are new signs this evening that the economy is slowing down. While the unemployment rate has fallen to a five-year low, the economy is not cranking out new jobs the way it had been. So what's going on? Here's Anthony Mason.”

Anthony Mason began:

“Rising interest rates and rising gas prices are beginning to put the brakes on the U.S. economy.”

John Silvia, Wachovia Securities: “And yes, the economy is cooling down and now the question is how much and how fast.”

Mason: “The newest numbers, just 75,000 jobs were added to the economy last month, well below forecasts. Manufacturing lost 14,000 jobs. But retail took the biggest hit, losing more than 27,000. Wal-Mart, the world's biggest retailer, reported slowing growth this week. Customers are spending less because they're paying more for gas. And John Silvia says the economy is just starting to feel the pain.”

Silva: “This is not a one-shot very short three-month deal. I think it's a sustained impact on consumer spending and consumer habits in general.”

Mason: “The other hammer to the economy came from the once-booming construction sector. It came to a standstill in May, adding only a thousand jobs after new home building fell in April for the first time in almost two years.”

David Lereah, National Association of Realtors: “The builders right now are beginning to cut back production. They don't want to get caught with their financial pants down.”

Mason: “Because home sales are falling as mortgage rates continue to rise; a 30-year fixed now averages about six and two thirds percent, the highest level in four years.”

Lereah: “We are at a key transition point in the housing markets. Because the housing markets are cooling, we're on course for a soft landing but if you continue to raise rates, that soft landing may turn to hard.”

Mason: “One major builder reported a nearly 30 percent drop in new orders for the past two months. Now that ripples right through the economy. Buying slows, then building slows, then hiring slows. And that, Russ, is why the economy is slowing.”