The press's reporting on the Obama era's awful economy has been nothing short of abysmal.
Looking at the bigger picture on July 25, MRC Business's Julia Seymour named "6 key indicators of (a) weak economy" the press has glossed over or ignored since the recession ended seven years ago. The most obvious item she identified is the fact that the current alleged "recovery" is by far the worst since World War II. On August 2, she noted that the press's pattern of negligence continued, as all of the Big Three broadcast networks' Friday evening newscasts ignored the tepid annualized 1.2 percent second-quarter economic growth the government reported that morning. One other journalistic failure relates to how less noticed but still critical economic reports are covered. The Associated Press in particular has proven quite adept at making weak or bad news appear good — at least in their headlines and earlier verbiage.
Martin Crutsinger's coverage of Thursday's Manufacturers’ Shipments, Inventories and Orders report from the Census Bureau is a perfect exhibit.
Here is the headline to and opening paragraph of Crutsinger's report:
US INVESTMENT ORDERS EDGE UP 0.4 PERCENT IN JUNE
A key category of orders to U.S. businesses that tracks investment posted a small gain in June after two months of declines.
The average reader stopping at the headline or after that first paragraph — in other words, every user of a news feed who doesn't click through to the detailed article from their computer, tablet or smartphone, or newspaper reader who chooses not to go further — will believe that June was a good month, showing a turnaround. Hardly.
Crutsinger's next few paragraphs delivered a tiny bit of the context, but left out far more:
Orders that cover business investment plans rose 0.4 percent in June following declines of 0.6 percent in May and 0.9 percent in April. Overall orders dropped 1.5 percent following a 1.2 percent fall in May. It was the biggest setback for total factory orders since a 1.9 percent decline in February.
Manufacturing has struggled over the past year as weakness in the global economy and a strong dollar have hurt export sales and business investment has been crimped by the big drop in energy prices.
The small 0.4 percent rise in the investment category, which covers nondefense capital goods excluding aircraft, was the first positive gain in this closely watched category since a 0.3 percent rise in March and it was the strongest showing since an increase of 2.4 percent in January.
The most important element of the government's report was obviously the 1.5 percent overall orders drop, creating a combined 2.7 percent decline in the past two months. But Crutsinger was obviously desperate to lead with something that at least appeared positive. So he led with a category which rebounded by barely one-fourth (0.4 points divided by a combined 1.5 points) of what had been lost during the previous two months. It's also a category one can't even find in the government's detailed release. Instead, one has to go to the interactive tables to find the category the AP reporter mentioned and verify the percentages he presented.
The bad news just mentioned barely scratches the surface of how bad things have been for U.S. manufacturers for the past nearly two years:
- In the nondefense capital goods excluding aircraft category Crutsinger chose to highlight, seasonally adjusted orders have trailed the same month of the previous year in 18 of the past 20 months. June $62.4 billion in such orders is 11.7 percent below the metric's September 2014 peak.
- The situation is worse in overall orders, which (seasonally adjusted) have trailed the same month of the previous year for 20 straight months, "the longest streak in U.S. history" (I thought that the press was supposed to support record-breaking news, good or bad), and "which has always, without exception, coincided with recession." With one exception (February of this year), June's $447.4 billion in new orders was the lowest figure since February 2011.
- It just goes on and on. Year-to-date not seasonally adjusted shipments are down 2.8 percent, orders are down 2.6 percent, and unfilled orders are down 1.9 percent.
- Inventories, despite supposedly intense efforts by manufacturers to trim them, are still uncomfortably high when compared to shipments.
Naturally, none of this made it into Crutsinger's coverage. Instead, he wrapped by citing Monday's Manufacturing Index from the Institute for Supply Management showing that manufacturing is still expanding.
Nobody's interested in asking, "How can ISM's surveys be showing continuing expansion when orders and shipments have clearly been contracting since late 2014?" ISM denies it, but I believe that it is getting rosy surveys from firms which are doing well and not getting them at all from firms which aren't — or which have gone out of business, or which have moved some or all of their manufacturing operations out of the U.S.
Maybe some business journalist with a bit of curiosity should look into the inconsistency between the government's dismal data and ISM's continuing claims of expansion.
I know, it won't happen, because during the Obama era, there's no interest in finding something which might be bad news.
Cross-posted at BizzyBlog.com.