The federal government reported a $94.6 blllion deficit in July, only marginally better than the $97.6 figure posted in July 2013.
As has become its habit, the Associated Press's coverage of that result contained omissions, spin and half-truths about government tax collections, spending and the origins of the Obama administration's first four years of consecutive trillion-dollar deficits. Particularly annoying is the wire service's insistence on ignoring the large tax increase in two decades as a factor — in the interest, of course, of supporting the Obama administration's call for more of the same. Veteran Martin Crutsinger was responsible for this month's rendition. Excerpts follow the jump:
There were two pieces of significant economy-related news today. The first was that the Conference Board's index of leading economic indicators increased for the fifth straight month, this time by 0.3 percent, while May's increase was revised up to 0.7 percent. The second was that the University of Michigan's preliminary June reading on consumer confidence came in at 81.3, a decline from May. Both results trailed expectations.
Predictably, the Associated Press's Martin Crutsinger put a smiley face on the news, believing it shows that "that economic growth should accelerate in the second half of this year," while Bloomberg News's Nina Glinski was more sanguine, interpreting the confidence report as an indication that "Americans’ outlook for the economy dimmed." Excerpts from both efforts follow the jump.
Late this afternoon, I went to the Top Business Headlines page at the Associated Press's national web site to get today's new home construction news. Because the AP didn't have a story there (saved here for future reference), I knew it had to be bad, especially because to ignore it, the wire service made room in its Top 10 stories for an item on Toyota experimenting with fuel cells and aircraft orders at an air show in England.
The Census Bureau reported that seasonally adjusted housing starts fell by 9.3 percent in June after declining 7.3 percent in May. Seasonally adjusted applications for new building permits declined by 4.2 percent after a 5.1 percent revised May drop. Reporter Martin Crutsinger, doing his utmost to earn the "Worst Economics Writer" tag the National Review's Kevin Williamson conferred on him last year, blamed the weather, blamed "the South" without telling readers how the Census Bureau defines it, and ignored how, even after a very bad month, that region is still outperforming other regions in new homebuilding. Excerpts follow the jump (bolds and numbered tags are mine):
Slowly but surely, the confident assurances of a fantabulous second quarter for the U.S. economy — one which is supposed to make the serious first-quarter contraction reported on Wednesday a distant memory — are crumbling.
Yesterday at the Associated Press, Martin Crutsinger, who just a couple of weeks ago had been relaying confident second-quarter predictions of annualized 3.5 percent and even 4 percent growth, quoted a still-optimistic economist who, in Crutsinger's words, "said strength in other areas (besides yesterday's weak consumer spending report — Ed.) should still lift economic growth to around a 3 percent annual rate in the current quarter." Today, in covering the University of Michigan's consumer confidence report, Christopher Rugaber, Crutsinger's dynamic duo buddy at the AP, brought the growth figure down to a level which won't even offset the dreadful first quarter:
My, those "this quarter's really, really going to be great" predictions can disappear so quickly these days.
Yesterday, in the wake of the government's third revision to gross domestic product showing that the economy shrunk by an annualized 2.9 percent during the first quarter instead of the previously reported 1.0 percent, commentators, analysts, and economists fell all over themselves insisting that the second quarter and the rest of the year will be fine. The reaction at Goldman Sachs was — get this — to raise their estimate for second-quarter growth from an annualized 3.8 percent to 4.0 percent. Today, in the wake of a particularly weak consumer spending report for May, the backpedaling — well, partial backpedaling — is under way, particularly at the Associated Press (bolds are mine):
The press, even in the wake of yesterday's awful reported 2.9 percent annualized first-quarter contraction, continues to regale us with noise about the economy's "recovery" during the past five years.
As P.J. Gladnick at NewsBusters noted yesterday, CNNMoney.com's Annalyn Kurtz, in giving readers "3 reasons not to freak out about -2.9% GDP," concluded her report by telling readers that "This recovery is underway, but it's choppy and still very slow." Actually, it may have resumed this quarter. At the Associated Press yesterday, Martin Crutsinger all too predictably wrote that"the setback is widely thought to be temporary, with growth rebounding solidly since spring." After almost five years of this nonsense, it's long past time that they start telling readers, listeners, and viewers that this economy bears more resemblance to the 1930s economy under Franklin Delano Roosevelt than it does any post-downturn economy we've seen since the end of World War II. Hard proof follows the jump.
Sounding a familiar theme at the Associated Press ahead of awful economic news, Christopher Rugaber and Martin Crutsinger prepared a column in advance of tomorrow's final report on the economy's first-quarter economic contraction reminding us, with far more certainy than is justified, that "A GRIM US ECONOMIC PICTURE IS BRIGHTENING."
Guys, before you "brighten," you first have to step out of the darkness. According to the wire service's dynamic duo of reporting on the economy (I guess I could add Josh Boak and call them "the three amigos"), tomorrow's report on the nation's first-quarter Gross Domestic Product is expected to show that it contracted by "nearly 2 percent" on an annual basis. AP reports a week ago didn't include "nearly." Bloomberg News is currently predicting a contraction of 1.8 percent. I'd like to be wrong, but I'm concerned that it might be significantly worse. But Rugaber and Crutsinger say, "Don't worry, be happy; the rest of the year will probably be fine" (bolds and numbered tags are mine):
You've got to hand it to Martin Crutsinger at the Associated Press. His Thursday writeup on May's disappointing retail sales result — a 0.3 percent increase compared to expectations of 0.4 percent to 0.6 percent — was infused with optimism. It's "unlikely to derail overall economic growth." There's been a "revival in consumer spending." We'll see "boosting incomes and supporting stronger consumer spending" as a result of more hiring."
But along the way, Crutsinger quietly downgraded his estimate of second-quarter and full-year economic growth. Just a few weeks ago, AP reports were predicting that the second quarter might come in at an annualized 4 percent, and that 2014 on the whole would surely come in at 3 percent or greater, even after the first quarter's annualized 1.0 percent contraction. Let's see how Crutsinger stealthily reported a far lower estimate after the jump (bolds and numbered tags are mine):
The AP, like most establishment press outlets, has virtually if not completely ignored an inconvenient and alarming Obamacare-related statement in a footnote found in a recent Congressional Budget Office report. Paul M. Krawzak at Roll Call, who reported on it last week, seems to have been the first one to discover it. In Krawzak's words, the CBO "said it is no longer possible to assess the overall fiscal impact of the law." This didn't stop Crutsinger from relaying a claim about projected Obamacare cost savings which the CBO's surrender has rendered irrelevant. There's a good chance that he ignorantly did so because his colleagues haven't covered CBO's white-flag statement (if they have and he went ahead anyway, that's an even bigger problem).
After investing so much emotional energy in the idea that the weather-impaired contracting U.S. economy of the first quarter is going to give way to a super-duper awesome second quarter and strong rest of the year, it was foolish to think that Martin Crutsinger at the Associated Press, aka the Administration's Press, would backtrack after just one contradictory report on consumer spending, which "unexpectedly" fell 0.1 percent in April, confounding expectations of a 0.2 percent pickup.
And of course he didn't. What's remarkable is that Crutsinger's Friday report seemed to get even more aggressive with his second-quarter prediction, citing "some analysts" who believe that it will come in at an annualized 4 percent — quite the reversal from the first quarter's 1.0 percent annualized contraction. Meanwhile, the AP reporter missed a less buoyant report from his colleague Christopher Rugaber which punctured a bit of Crutsinger's premise. Excerpts from both items follow the jump.
At the Associated Press, aka the Administration's Press, Martin Crutsinger has pretty much proven that he's been on some kind of workout regimen. If he wasn't, he couldn't possibly have carried so much Obama administration water in his 1:45 p.m. report on the state of the economy (saved here for future reference, fair use and discussion purposes) as he did.
Crutsinger's message: Pay no attention to that lousy GDP report we expect to see tomorrow morning (there's some reason to believe that it may get artificially juiced, which I'll explain later). Starting this month, the economy has been smokin', and this year's going to be just great. Too bad the evidence for his optimism mostly doesn't exist — and to the extent it does, it's not rip-roaring great. Excerpts from Crutsinger's latest crummy creation follow the jump.
Associated Press stories today on the quarterly earnings releases of Wells Fargo (unbylined) and JPMorgan Chase (by Steve Rothwell) essentially mocked the nearly continuous monthly stream of reports the wire service's economics writers, particularly Martin Crutsinger and Chris Rugaber, have generated about the "housing recovery" during at least the past year.
The Wells Fargo story disclosed that the nation's largest mortgage lender "funded $36 billion worth of mortgages in the first quarter, down sharply from $109 billion a year earlier." The following graphic from the bank's detailed financial report tells the full story:
It appears that Aron Heller at the Associated Press, aka the Administration's press, might have been applying lessons learned from the wire service's U.S. business and economics writers in his coverage of Israel's settlement activity. Heller also seems strangely fond of this mythical thing known as the "international community."
AP business and economics writers like Martin Crutsinger and Christopher Rugaber have regaled us with the wonders of the alleged housing recovery during the past two years, but haven't been quite as good at telling us that over 4-1/2 years after the recession officially ended, new home sales and construction activity is still only about 60-65 percent of what is seen as healthy by most economists and analysts. Heller pulled an analogous trick in his report; fortunately Evelyn Gordon at Commentary (HT Powerline) was astute enough to catch his misdirection, one in which President Obama has also engaged.
This morning at the Associated Press, aka the Administration's Press, Martin Crutsinger reacted predictably to the Census Bureau's January new home sales release by commenting primarily on the forest while mostly ignoring the widely divergent health of the trees. Though he compared January to December for the country's four regions, he failed to note that three of them reported the same or fewer sales than January 2013.
This caused him to spin an unsupportable assessment of today's news as "offering hopes that housing could be regaining momentum after a slowdown last year caused by rising interest rates." Maybe in the South, Marty, but nowhere else. Several paragraphs from Crutsinger's report, followed by a regional breakdowns, are after the jump.
The January 2014 New Residential Construction report released by the Census Bureau this morning was very weak. Building permits fell from December by a seasonally adjusted 5.4% (-1.3% for single-family homes). Housing starts fell by 16.0% (-15.9% single-family. The annualized single-family starts figure of 573,000 was the lowest in 17 months.
Naturally, Martin Crutsinger at the Associated Press, aka the Administration's Press, blamed it on the weather, and promised that prosperity is coming soon in his very first paragraph. Too bad some of the data he cited clearly refutes the "blame the weather" meme.
The Associated Press, Bloomberg and Reuters all focused on the supposedly positive news of increased consumption reported in today's "Personal Income and Outlays" release from the government's Bureau of Economic Analysis. In the process, two of the three ignored a particulary dreadful statistic about disposable income, while the third (Bloomberg) misinterpreted its meaning.
The dire statistic is the year-over-year comparison of monthly disposable income, which took a deep dive in December, turning in the worst year-over year performance as seen here, in 40 years:
There was another appearance of the dreaded U-word ("unexpectedly") this morning at Bloomberg News.
The Commerce Department's advance report on December durable goods orders and shipments showed a seasonally adjusted 4.3 percent decrease in orders from November, while November was revised down from a positive 3.4 percent to 2.6 percent. Economists' median prediction for December was for a 1.8 percent increase. Bloomberg's Victoria Stilwell had an excuse at the ready, and as will be seen, chose to use it even though she knew it was a stretch (bolds are mine throughout this post):
Usually, when the Associated Press covers the Census Bureau's monthly new-home sales releases, its reporters will tell readers that a "healthy" market should generate about 700,000 sales per year (examples here and here). Though I believe that figure is insufficiently ambitious, given that pre-bubble annual sales averaged 776,000 from 1993-2000, it apparently has somewhat wide acceptance.
Of all the times to mention that benchmark, the bureau's final report for 2013 released this morning would be it. But AP's Martin Crutsinger failed to do so, possibly because astute readers would have noted that the year's actual sales of 428,000 units show that the industry, despite years of a media-hyped "housing recovery" which is supposedly leading the economy out of the wilderness (cough, cough), is still operating at a miserable 61 percent of capacity (428K divided by 700K). Excerpts from Crutsinger's report follow the jump (bolds are mine):
As would be expected, Associated Press reporter Martin Crutsinger Wednesday treated Federal Reserve Chairman Ben Bernanke's announcement that the nation's central bank will reduce the amount of money it creates out of thin air from $1.02 trillion per year to $900 billion, i.e., from $85 a month to $75 billion, as "its strongest signal of confidence in the U.S. economy since the Great Recession." As will be shown, it's a sign of continued serious weakness.
The pretense inherent in all of this is comparable to teaching a child how to ride a bike, raising the training wheels by one-eighth of an inch, and pronouncing him or her ready to roll. What should be troubling is that the tiny reduction means that the Fed will be financing a much higher percentage of next year's projected deficit and increase in the national debt than it has in previous years. That would seem to indicate that the nation is running out of other buyers who might be interested in purchasing Treasury securities, and that Bernanke's own words in July, namely that "the economy would tank" if he wasn't so obviously and artificially propping it up, are truer than ever.
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):