You would think that economic forecasters, who have been obsessing over the impact on economic growth of October's 17 percent partial government shutdown might have noticed that a lot of people have all of a sudden learned that they're about to experience a major cut in their take-home pay. You would be wrong.
Hundreds of thousands of Americans had received health insurance cancellation notices by September 30, and had also learned that they will be on the hook starting next year for hundreds of dollars in premium increases on the Obamacare exchanges. It should be obvious that most affected people would have started spending less on other items virtually immediately, and that they will continue to be in major cutback mode indefinitely. But I didn't find anyone in the establishment press who mentioned it. Nor did I find anyone who noted that the millions of Americans facing higher health insurance premiums are also going to materially impact fourth quarter growth and Christmas shopping season results.
The Census Bureau reported today that sales of new single-family homes in the U.S. reached an annualized level of 421,000 in August. That was up by almost 8 percent from July, but a whopping 15 percent below the 497,000 the bureau originally reported for June (two subsequent revisions have taken that number down to 454,000). Given the shock decline to below 400,000 in July, August's bounceback was clearly inadequate. Additionally, as Zero Hedge noted this morning, the median new-home sales price fell to its "lowest level since January 2013."
One thing which is almost as reliable as the sun rising in the east is the Associated Press, aka the Adminstration's Press, putting a better face on the federal government's fiscal situation than it deserves when a Democrat is in the White House. Almost as reliable is the arrival in a related report of some kind of statement about spending cuts which describes them as "deep," "steep," or some other awful adjective.
After a two-year hiatus, the Associated Press has apparently decided that Americans need a weekly reminder of how bad weekly layoffs were during the recession.
In June 2011, possibly as a result of some hectoring by yours truly, the wire service totally or almost totally stopped reminding readers that "(unemployment) claims applications peaked at 659,000 during the recession." That tired figure was already over two years old, and isn't even an all-time record (several weeks during the 1980s were higher, even with a much smaller workforce). So who cares? But in each of the past three weeks, AP has resurrected that tired number (since revised slightly upward because of changes to seasonal adjustment factors), as if a one-week stat from almost 4-1/2 years ago means anything to anybody right now:
What do you do when you're the Associated Press, aka the Administration's Press, and you're trying to do your level best to described a floundering economy without incurring the wrath of the Obama administration? You search for positive-sounding words to describe what is in reality a marginal situation.
The AP seems to have settled on "steady" and "steadily."
At the conclusion of his report on the federal government's July Monthly Treasury Statement, the Associated Press's Martin Crutsinger wrote that federal spending through the first ten months of the current fiscal year is "down 2.9 percent from a year ago," and that the decline "reflects, in part, automatic government spending cuts that began taking effect March 1."
Those "automatic cuts" represent only a very small part of the decline, as will be seen after the jump.
On Thursday, the Department of Labor announced that initial unemployment claims during the week ended August 3 rose to a seasonally adjusted 333,000, up from a revised 328,000 the previous week.
A "breaking" tweet from the Associated Press issued just a few minutes after the report's 8:30 a.m. (5:30 PT) release read as follows: "U.S. unemployment aid applications up only 5,000 to 333,000 - a level that signals steady job gains." The folks at Twitchy.com properly wondered how rising jobless claims can lead to more jobs. The wire service abandoned the tweet's claim only 19 minutes after its release, and went as far as admitting that "hiring lags" in a longer, late afternoon item.
It wasn't a tough prediction, but late Friday morning Noel Sheppard at NewsBusters noted the seemingly "metaphysical certitude the Obama-loving media will be falling over themselves in the next 48 hours to report the better than expected jobs numbers in June." Well, of course.
Noel also wondered how much attention the press would pay to less than desirable aspects of yesterday's jobs report from Uncle Sam's Bureau of Labor Statistics. The answer at the Associated Press, aka the Administration's Press, which carried at least eight reports relating to the news and its effects on the financial markets, was "hardly," as will be seen in excerpts after the jump. Additionally, the AP reversed its initial take that yesterday's non-change in the unemployment rate would keep the Federal Reserve's stimulus flowing, later deciding that the jobs report was so good that the Fed can let the tapering begin.
Before the government released its first estimate of first-quarter economic growth in late April, the establishment press, particularly Bloomberg News and the Associated Press, salivated at the chance to report the then-predicted "robust" annualized growth of 3 percent and to describe how the economy had "accelerated" from the previous quarter's pathetic 0.4 percent. When that first estimate came in at only 2.5 percent, most news organizations at least had the integrity to pronounce the news disappointing. But not Martin Crutsinger and Christopher Rugaber at the AP, aka the Administration's Press, who opened their coverage by saying that "the American economy quickened its pace early this year despite deep government cutbacks."
The government's second estimate in May was little changed at 2.4 percent. But Wednesday's third and final estimate (pending annual revisions going back several years, the next of which will appear in July) came in at 1.8 percent, a 40 percent drop from so-called experts' original predictions (1.2-point difference divided by the original 3.0 percent). The AP's reaction was to produce a terse three-paragraph blurb which was gone from its national web site within 24 hours, followed by a late afternoon report which blamed higher Social Security taxes and "federal spending cuts":
Continuing the business press's slavish devotion to seasonally adjusted figures in government reports to the exclusion of looking at what actually happened, Martin Crutsinger at the Associated Press, aka the Administration's Press, began his Tuesday dispatch on May's new-home sales report from the Census Bureau as follows: "Sales of new homes rose in May to the fastest pace in five years, a solid gain that added to signs of a steadily improving housing market."
Except for two "little" things: Fewer homes were actually sold in May than were sold in April, and May's reported increase in seasonally adjusted annualized sales only came about because of a tax break which ended in April 2010:
You've got hand it to some (probably most) of the reporters at the Associated Press, aka the Administration's Press. Their story is that the economy is all right, and by gosh, they're sticking to it.
Tom Raum's dispatch yesterday is a case in point. Along the way, he pulled out several of the tired spin-driven claims which have long since been taken down but which haven't yet penetrated the skulls of low-information voters. Raum and AP seem puzzled that the supposedly okey-dokey economy doesn't seem to be helping President Obama or Democrats' 2014 congressional and senatorial election prospects (bolds and numbered tags are mine):
On Friday, the government reported that the economy grew by an annualized 2.5 percent during the first quarter. Earlier today, in Part 1 of this series, (at NewsBusters; at BizzyBlog) I showed that while most news organizations, including CNN, Bloomberg and Reuters, characterized that news as a disappointment, especially comparred to expectations of 3.0 percent or more following an awful fourth quarter of 0.4%, Martin Crutsinger and Chris Rugaber remained irrationally exuberant, not only about the "quickened" pace of growth but about prospects for higher growth in the second half of this year.
In Part 2 (at NewsBusters; at BizzyBlog), we saw how even others at the self-described Essential Global News Network disagreed with Crutsinger's and Rugaber's joint assessment. A "News Summary" item was headlined "STOCKS STALL AS GROWTH DISAPPOINTS." A report by AP Markets Writer Steve Rothwell was headlined "STOCKS STALL ON TEPID US ECONOMIC GROWTH," and forecasted slower growth during the rest of the year. There is one other key paragraph written by the pair of AP economics writers which deserves separate vetting. It follows the jump (bolds are mine throughout this post):
On Friday, the government reported that the economy grew by an annualized 2.5 percent during the first quarter. As I noted in Part 1 (at NewsBusters; at BizzyBlog), three establishment press outlets (CNN, Bloomberg, and Reuters) pronounced the result "disappointing" -- but not Martin Crutsinger and Christopher Rugaber at the Associated Press, whose headline read "AFTER NEAR-STALL IN LATE 2012, US ECONOMY PICKS UP," and whose content described the economy as having "quickened its pace" as "the strongest consumer spending in two years fueled a 2.5 percent annual growth rate in the January-March quarter."
It turns out that the AP pair's enthusiasm was not only not shared at other news organizations. It wasn't even shared within AP, as will be seen after the jump.
On Friday, the government reported that the economy grew by an annualized 2.5 percent during the first quarter. The awful 0.4 percent result seen in the fourth quarter was largely sloughed off as caused by a number of one-time factors. Analysts convinced themselves that reported first-quarter growth would come in at 3.0 percent or slightly higher in Friday's release. Instead, we saw what Zero Hedge noted was the biggest such expectations miss since September 2011.
As a result, at least three establishment press organizations pronounced the result disappointing -- except for two business reporters at the Associated Press whose names are virtual fixtures here.
On February 28, though he hedged a bit, Martin Crutsinger at the Associated Press, aka the Administration's Press, wrote the following about prospects for economic growth: "The only impediment may be the across-the-board government spending cuts that kick in Friday — especially if those cuts remain in place for months."
Having established the template, the self-described Essential Global News Network has apparently decided that they need to do all they can to promote it. After today's sharp decline in consumer confidence as reported by the Conference Board, AP reporter Marcy Gordon's related dispatch opened with a whine about "massive government spending cuts," tried to reinforce her claim in a later paragraph, and saved contradictory information for an even later one (bolds are mine throughout this post):
Today, on the third anniversary of the enactment of state-managed healthcare, aka the Patient Protection and Affordable Care Act (ACA), aka ObamaCare, it's worth noting a precursor of what we can expect from the establishment press as the law's implementation presses on. It can be summed up in eight words: "Hype the alleged good. Ignore the obviously bad." Distilled in four words: "Toe the administration line."
Two examples of how the press is ignoring the obviously bad came from the Associated Press, aka the Administration's Press, in its March 6 caoverage of the contents of the Federal Reserve's "beige book" released that day. The Fed's report contained five specific comments, four of them negative and one neutral, about the current and imminent impact of ObamaCare. None made it into either AP report. Many other outlets also ignored or minimized those comments.
Crutsinger described the past four months as a "hiring spree," and the job market as "accelerating." Even sticking with the seasonally adjusted figures, that doesn't stand up well, given that there was a big revised dip in job additions in January. Second, he contended that "Hiring would be rising even faster if governments weren't shrinking their workforces, as they have been for nearly four years" -- as if government hiring and the higher taxes which would accompany it at the state and local levels or the higher amount of deficit financing required at the federal level would have no effect on private employers' rate of hiring. And no establishment press report would be complete without moaning about how goverment employment continues to contract ever so slightly and how impending spending "cuts" which aren't cuts at all threaten the current wondrous conditions. That's not all, of course.
On Thursday, the government reported that the economy didn't contract by a tiny annualized 0.1 percent in the fourth quarter of 2012 as originally reported. Instead, the nation's gross domestic product (GDP) expanded by an equally tiny 0.1 percent. Expectations had been that the revision would go positive by an annualized 0.5 percent.
According to Martin Crutsinger at the Associated Press, aka the Administration's Press, "the only impediment" to the economy resuming annualized growth of 2 percent or so (which is actually unimpressive in historical context) "may be the across-the-board government spending cuts that kick in Friday - especially if those cuts remain in place for months." In Crutsinger's world, the payroll tax increase which kicked in on January 1, gas prices which have risen nationally to about $3.70 per gallon from $3.25 in the past 45 days, and troubling January and early-February sales results at Wal-Mart don't matter. There's also an obvious problem seen in his third and fourth paragraphs (bolds are mine):
You've got to hand it to the headline writers at the Associated Press, aka the Administration's Press. They sure know how to abuse their power to shape public perceptions.
The headline at Martin Crutsinger's report this morning on projected economic growth for 2013, which the wire service is treating as this morning's "Big Story," reads: "ECONOMISTS PREDICTING MODERATE GROWTH IN 2013." Many people using computers, tablets and smartphones will see that headline, conclude that the economy's not so bad, and move on without clicking through. Too bad Crutsinger's first two paragraphs directly contradict that headline.
Crutsinger also erroneously reported that the government turned in its first monthly surplus since April of last year (no, it was really September of last year), told readers that "the government is spending less on some programs" without telling them that total year-to-date spending so far is up by over 3 percent compared the first four months of fiscal 2012, and made it appear as if "higher taxes for some Americans" are narrowing the budget gap a bit, when the fiscal cliff raised taxes for every employed and self-employed person who pays into the Social Security system. Other than that, he did a good job (/sarc). Exceprts follow the jump (bolds and numbered tags are mine):
In his coverage of the Conference Board's Consumer Confidence report released earlier today, the Associated Press's Martin Crutsinger conveniently avoided using quote marks when he wrote that "Conference Board economist Lynn Franco said the tax increase was the key reason confidence tumbled in January, making Americans less optimistic about the next six months." That isn't what Franco said.
Crutsinger also -- finally -- told AP readers and subscribers what other reporters and commentators have been saying for about two weeks, namely that analysts' estimates of economic growth in tomorrow's government report on gross domestic product are a for a very weak annualized 1%.
The real news in today's new-home sales information published by the Census Bureau is that September's previously reported 389,000 in seasonally adjusted annual sales was written down by over 5 percent to 369,000. Hmm -- The higher figure, aggressively touted as the highest in 2-1/2 years by the Associated Press and other establishment media outlets, was reported on October 24, just 13 days before Election Day on November 6. Now we learn that it was a mirage, and that the revised figure was merely the same as the number turned in four months earlier and barely above February. In fact, the new home market, portrayed throughout the summer and early fall as recovering somewhat nicely, merely treaded water. That trend continued in October, as annualized sales came in at 368,000. Imagine that.
To his credit, the Associated Press's Martin Crutsinger at least acknowledged the major prior-month revision in each of his first two paragraphs; however, the AP's headline writers ignored it. To Crutsinger's detriment, it's clear that he tried very hard to find someone who would pin a major portion of the blame for October's 0.3 percent drop on Superstorm Sandy. When he couldn't, he decided to take it on himself to make the point (bolds are mine):
Well, there's one little bit of good news in Martin Crutsinger's final report on yesterday's release of the federal government's October Monthly Treasury Statement (I did a review of his initial take yesterday [at NewsBusters; at BizzyBlog]). The good news is that Crutsinger, unlike in most months during the past several years I have reviewed such reports, actually identified the single-month amount of money the federal government spent in October, namely $304 billion. We'll see if he continues the practice of reporting single-month spending amounts in future months.
The rest of Crutsinger's coverage is typically pathetic and predictable. He failed to correctly define what the deficit really is for his readers, understated the impact on fiscal 2013 of any tax or spending decisions the President and Congress might agree on, ignored the likelihood that receipts in teh coming year are likely coming back to levels last seen in fiscal 2007 (meaning that virtually the entire problem facing the country has to do with spending, not collections), and engaged in the seemingly required exercise of blaming George W. Bush for running deficits (not disclosed as far smaller) and conducting wars Congress agreed to fight before Obama came into office. As I said, typically pathetic and predictable.
The government's October 2012 Monthly Treasury Statement was released at 2 p.m. It tells us that the government took in $184 billion ($21 billion more than last year) while spending $304 billion ($43 billion more), leaving a $120 billion deficit. That's 22% higher than the October 2011 shortfall of $98.5 billion.
The early report from the Associated Press's Martin Crustinger predictably tells us that discussions over changing this ongoing situation and addressing the "fiscal cliff" involve how "to prevent tax increases and deep spending cuts from kicking in Jan. 1." "Deep"? October 2012 spending annualizes out to $3.65 trillion, which if continued, as seen in comparison to figures for the past five years which follow, would be an all-time record.
Once again, a reporter from the Associated Press, aka the Administration's Press, has told a major fib about the situation in the new-home construction industry, thereby vastly exaggerating its degree of improvement -- claiming a 60% surge during the past nearly 3-1/2 years when it has been 15% at most.
Today's figures from the Census Bureau on housing starts weren't terrible, but they surely weren't cause for major optimism -- except at the AP, where Martin Crutsinger cited "steady progress in the housing recovery" and committed the same serious mistake other AP writers have made (examples here, here, and here), namely pretending that the term "housing starts" has the same meaning as "home construction."
Today, per Nasdaq.com, the Dow Jones Industrial Average rose by 4.49 points to 13107.48, the S&P 500 went up 1.19 points to 1410.49, and the NASDAQ gained 4.05 points to close at 3081.19. The average of the three gains is less than 0.1%.
That didn't stop the disseminators of CNN Money's email at the close of business from interpreting the result as being due to "signs of stronger U.S.growth." Huh?
It's becoming increasingly clear that the Associated Press, aka the Administration's Press, believes there are two primary kinds of users of its output: those who only read headlines and those who read on or click through. It often dresses up the headlines with inaccuracies, omissions, and occasional downright falsehoods, which more often than not are respectively rendered properly, included, and stated truthfully (or at least sort of close) in the actual content.
It's hard to find a more stark example of a contradiction between an AP headline and its underlying content than Martin Crutsinger's late afternoon report Friday following that morning's Gross Domestic Product report:
Today's report on the growth of gross domestic product (GDP) during the second quarter didn't impress anyone -- except, apparently those who send out email alerts to CNN Money subscribers.
For several years, it has seemed like the primary goal of these alerts has been to create the illusion of pervasive prosperity when the economic news is even remotely tolerable, and to ignore or downplay news that is really bad -- all so that the relatively disengaged can be convinced that the economy isn't performing as poorly as it really is. The email alert received shortly after the government released its report showing that the economy grew at an annualized 1.5% rate during the second quarter arguably fits both categories:
Uncle Sam's June Treasury Statement released today told us that with three months remaining in the 2012 fiscal year the government has already run up a deficit of over $900 billion. According to the Associated Press's Martin Crutsinger, Americans should see that as a "positive sign," because "deficit is growing more slowly than last year."
During the final three months of fiscal 2011, the government ran a deficit of $326 billion, which is why the following statement found in Crutsinger's Thursday afternoon report is such a howler:
Not only is the Associated Press aptly currently described as the Administration's Press -- as least as long as the White House's current occupant remains there -- it also seems to be serving as the Administration's Protection.
In a story about the "Lie-bor" scandal, wherein British banks have admitted to colluding to set the London Interbank Offered Rate (LIBOR) -- arguably the world’s most important benchmark for interest rates -- artificially low, AP reporter Martin Crutsinger "somehow" forgot that current Treasury Secretary Tim Geithner was President of the New York Branch of the Federal Reserve Bank during much of the time period in which Congressional investigators are interested. Clearly, they want to know what Geithner knew, and when he knew it. The first three paragraphs of Crutsinger's writeup, followed by his sole context-free mention of Geithner, follow the jump (bolds are mine throughout this post):