On May 1, the Associated Press's Paul Wiseman was pleased to tell the wire service's readers and subscribing outlets that "The University of Michigan's sentiment index rose to 95.9 from 93 in March," reaching "its second-highest level since 2007." Among other things, the survey's chief economist said that the result reflected "improving prospects for jobs and incomes."
What a difference two weeks makes. Today's preliminary U of M survey for April dropped to 88.6, completely missing expectations of 95.9. Zero Hedge notes that it's the biggest expectations miss on record, and the largest single-month drop since December 2012. Naturally, a search at its national site indicates that the AP prepared no story on the U of M report.
AP's choice to ignore the U of M survey likely guarantees that there will be no mention of it at most establishment press print and broadcast outlets.
According to two Bloomberg reporters, the U of M survey results showed that "A souring economy has curdled the American consumer’s mood" (bolds are mine throughout this post):
Consumer Sentiment Plunge Lowers Odds of U.S. Growth Rebound
... The University of Michigan’s preliminary sentiment index for May plunged to 88.6, the lowest since October, from 95.9 the prior month. It was weaker than even the lowest estimate of 68 economists surveyed by Bloomberg. Another report showed factory production stalled in April.
News that the world’s largest economy sputtered last quarter, combined with uneven employment gains, shook households this month, raising concerns that spending will be slow to pick up. A strong dollar and weak oil prices also are holding back manufacturing, further denting the likelihood of a quick rebound in the rate of expansion.
“It’s not very encouraging for growth prospects,” said Millan Mulraine, deputy head of U.S. research & strategy at TD Securities USA in New York, who projected a drop in confidence. “The spate of numbers has been quite weak.”
The Standard & Poor’s 500 Index closed at record for a second straight day as investors speculated the Federal Reserve would continue to support economic growth given the weak data. The S&P 500 rose 0.1 percent to 2,122.73 at the close in New York.
“The decline was widespread among all age and income subgroups as well as across all regions of the country,” Richard Curtin, director of the Michigan Survey of Consumers, said in a statement.
In a separate post, Zero Hedge observed that "The percentage of respondents ... who 'think they (or their spouse) will lose their job over the next 5 years' soared to its highest since March 2009." That seems newsworthy, doesn't it, AP?
Note that Bloomberg's Sho Chandra and Michelle Jamrisko wrote that the stock market inched up today because, thanks to lousy reports like the U of M survey, traders expect the Federal Reserve to keep interest rates artificially low. (Set aside that doing so has played a part in the worst post-recession economic growth since World War II; it's obviously still true that if Fed's artificially low rates went away, the economy, as former Fed Chairman Ben Bernanke stated two years ago, "would tank" — and the markets know it.)
The AP did cover the Federal Reserve's April industrial production report earlier in the day. It too was awful, but the wire service's Christopher Rugaber tried to offset the pessimism with news about another report covering just one state:
US INDUSTRIAL OUTPUT FALLS FOR 5TH MONTH ON LOWER DRILLING
A plunge in energy-related drilling and sluggish manufacturing sent U.S. industrial output down for a fifth straight month in April.
Overall industrial production slid 0.3 percent in April after a drop of the same size in March, the Federal Reserve said Friday. The figures suggest that weakness in manufacturing and mining is weighing heavily on the economy.
... A separate report Friday showed that U.S. manufacturers are slowly adjusting to the challenges of a strong dollar and low oil prices.
The Federal Reserve Bank of New York said that its Empire State manufacturing index rose to a plus 3.09 reading in May, up from a negative 1.19 reading in April. The index was lifted by the first increase in new orders in four months.
The Empire State index provides an early look at U.S. manufacturing each month, and May's reading is a sign that manufacturing could be starting to recover.
Clearly, Rugaber had to dig deep to find a reason for optimism. My recollections are that the Associated Press almost never covers the monthly Empire State report, at least as a national story. But at the AP, aka the Administration's Press, the operating mantra is apparently "heads we report, tails we ignore."
Cross-posted at BizzyBlog.com.
