Question: When is a New York Times "Manufacturing Recession" not a recession?
Answer: When the Institute for Supply Management (ISM) keeps on issuing monthly reports, such as the one yesterday covering April, telling us that manufacturing is in expansion mode.
On February 28 (second item at link), Times Business writer David Leonhardt wrote the following:
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.
To this day, Leonhardt appears to be the only person to "notice" the recession in manufacturing -- because it doesn't exist.
The TimesSelect current tease for Leonhardt's article, which is now behind the Times' subscription firewall, is even worse, leading one to think that it tells us that the whole economy is in recession (bolds are mine):
ECONOMIX; Manufacturing Slips Quietly Into Recession
David Leonhardt column on Commerce Department report that durable goods plunged 8 percent in January, pushing country into recession; says report seems to focus on investors' attention on problems in manufacturing and became one more reason for people to sell stocks .....
(Aside: Great call on the stock market, eh?)
Fortunately for America's real economy, the Times, and Leonhardt, were wrong on February 28. They have been wrong ever since. In the ISM's report on manufacturing for April, its closely watched Purchasing Managers Index (PMI) came in at 54.7. Any reading over 50 indicates expansion.
April was the third straight month of manufacturing expansion, after two of the previous three months (Nov. 2006 and Jan. 2007) had shown slight contractions.
The habit of reality beating analysts' predictions continues. The Associated Press reported that expectations had been that the PMI reading would come in at 51, barely above March's 50.9. The April result blew away those forecasts.
See for yourself: The PMI has been in expansion mode in 45 of the past 47 months. You would have to go back to the mid- to late-1970s to see a period of greater manufacturing strength than this economy has exhibited in the past four years.
Maybe the problem at the Old Grey Lady is that it can't see past the "recession" taking place in its own business. The Times' daily and Sunday circulations fell 1.93% and 3.37%, respectively, in the six months ended March 31. Maybe a big reason for those declines is that the paper continues to pretend there's a recession when there isn't one. From all appearances, based on this search, the paper has never retracted Leonhardt's claim.
Cross-posted at BizzyBlog.com.
