As Economic Data Weakens, AP's 'All Is Well' Reports Play the 'Weather' Card, Furiously Search For Silver Linings
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.
Rugaber's writeup on unemployment claims at least described this week's result as "seasonally adjusted," a necessary term which had somehow fallen into disuse in a couple of previous reports. But he went to "economists" engaging in sheer speculation to try to explain the increase (bolds are mine throughout this post):
APPLICATIONS FOR US JOBLESS BENEFITS RISE TO 348K
The number of people applying for U.S. unemployment benefits rose 14,000 last week to a seasonally adjusted 348,000, though the broader trend in applications remained stable.
But the four-week average was unchanged at 338,250, the Labor Department said Thursday. Applications are a rough proxy for layoffs. The average is not far above pre-recession levels, a sign companies are laying off few workers.
Economists said that winter storms two weeks ago may have caused some people to delay submitting their applications until last week, temporarily boosting the figures.
"Other evidence continues to point clearly to reasonably robust labor demand so we very much doubt the underlying trend in claims is picking up," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients.
... Harsh winter weather has chilled hiring in recent months.
... the bitterly cold weather has contributed to a run of disappointing economic data since the start of the year.
... With consumers cautious and the housing recovery slowing, economists have scaled back their forecasts for the January-March quarter. Most now expect growth in the first three months of the year to be 2 percent at an annual rate or below.
Shepherdson absurdly spoke of "reasonably robust labor demand" after two pathetic employment reports showing seasonally adjusted job additions of 75,000 and 113,000 in December and January, respectively. ("Robust" seems to be the go-to word these days, and its meaning now appears to be a proxy for "barely above mediocre.")
Boak's coverage of the miserable durable goods report had nothing at all to say about the even worse December result. He also had to resort to regaling readers with the glories of a positive number in January's report that didn't even make up for December's lost ground:
ORDERS FOR US DURABLE GOODS FELL 1 PERCENT IN JAN.
American businesses ordered fewer durable manufactured goods in January, cutting demand for planes, autos and machines. But a key category that reflects business investment rebounded on the strength of demand for electronics and fabricated metals.
The Commerce Department said Thursday that orders for durable goods fell a seasonally adjusted 1 percent in January from December. Much of the decline was driven by a 20.2 percent drop in demand for commercial aircraft, a volatile month-to-month category. Orders for all transportation-related equipment fell 5.6 percent.
More encouragingly, orders rose 1.7 percent in a closely watched category, known as core capital goods, which excludes volatile transportation and defense orders. This category had dropped 1.8 percent in December. (Wowie zowie. -- Ed.)
Economists track this category to determine whether business investment is expanding. Last month's rebound nearly erased all of December's decline, a sign that companies might be anticipating more business during spring.
"There is some evidence that the growth rate of equipment investment is strengthening," said Paul Ashworth, chief U.S. economist at Capital Economics. But "we won't know for sure until the weather improves."
Frigid weather and snowstorms have cut into factory output in recent months. As manufacturing has slowed, the effects have echoed across the economy to dampen hiring, retail demand and home sales.
Manufacturers made fewer cars and trucks, appliances, furniture and carpeting in January, as cold weather delayed shipments of raw materials and caused some factories to shut down, the Federal Reserve has reported. Factory production plummeted 0.8 percent last month, ending five straight months of gains.
So manufacturing didn't really slow down until January, but its slowdown caused hiring and retail demand to dampen in December and January. That doesn't make sense, Josh.
The truth is that there's a lot more than the weather going on here, and it isn't good. As Zero Hedge noted earlier today, a leading credit strategist at Bank of American has written that "we see no evidence of a strong rebound in spending as the weather improved significantly during the third week of February."
So what will the excuse be if the run of weak data continues? The experience-based guess here is that it will be "ABO" — Anything But Obamacare.
Cross-posted at BizzyBlog.com.