Two reports from earlier this week, one that warned of a "likely recession," and another that flat-out declared a non-existent "manufacturing recession," have to make you wonder, especially considering a positive report from the real world that came out earlier today.
First -- On Monday, the Associated Press turned murky comments by Alan Greenspan into "Greenspan warns of likely U.S. recession." Hundreds of papers, including The Washington Post, published the headline online and in print. Only a day later, AP issued a "never mind" report (”Economists: Recession unlikely”).
Second -- On Tuesday evening, the New York Times (may require registration), in an article by David Leonhardt, declared:
For Manufacturing, a Recession Has Arrived
The nation’s manufacturing sector managed to slip into a recession with almost nobody seeming to notice. Well, until yesterday.
Wall Street was caught off guard when the Commerce Department reported yesterday morning that orders for durable goods — big items like home computers and factory machines — plunged almost 8 percent last month. That’s a big number, but it really shouldn’t have come as too much of a surprise. In two of the last three months, the manufacturing sector has shrunk, according to surveys by the Institute for Supply Management that have been out for weeks.
It sure looks as if Leonhardt was engaging in wishful thinking:
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing.
Last time I checked, "an expansion of the overall economy" meant "growth," the opposite of "contraction," and well short of a "recession."
Now, from the real world -- The ISM Manufacturing Index for February came in at 52.3. Memo to the Times and the other media vultures waiting for the economy to tank: This means "expansion." You'll have to find your red meat somewhere else.
The first response at the ISM link from someone in the Chemical Products industry inadvertently says it all about Formerly Mainstream Media coverage of the US economy in the past few days:
"Business is booming in the fertilizer business."
With all the economic reporting manure being produced by the business press, it's no wonder.
Cross-posted at BizzyBlog.com.