The Census Burau's February Durable Goods report, released at 8:30 a.m. today, "unexpectedly" (Bloomberg did the U-word honors) came in with a seasonally adjusted 1.4 percent decline compared to the 0.2 increase analysts expected. Additionally, January's increase was revised down to 2.0 percent from 2.8 percent. Not adjusting for inflation, unadjusted (i.e., actual) February orders came in 2.3 percent below February 2014. Pending adjustments to February's figures, durable goods orders have declined by 5.3 percent in the past four months.
Despite all of this, the Associated Press's primary story on durable goods by Martin Crutsinger was gone from its Top Business Stories page by 2 p.m.
The only evidence that the government's awful report was released on the AP's "Top Stories page" this evening was a vague reference to "news that orders for long-lasting U.S. goods sank last month" and two paragraphs telling readers why it's no big deal in a separate story about the bad day in the stock market:
Before the market opened on Wednesday, the Commerce Department reported that orders to U.S. factories for long-lasting manufactured goods fell in February for the third time in four months. Demand for commercial aircraft, cars and machinery waned.
"You can put this durables report into your Surprise Index as it missed market expectations," said Christopher Rupkey, chief financial economist at MUFG Union Bank, in a note to clients. "But more importantly it is another piece of data that shows the real GDP economy is running 2 percent and not 3 percent."
Very few people believe that the "real GDP economy is currently running 2 percent" — at least during the current quarter. And if Rupkey believes that 2 percent is what we'll see for the full year, that's well below even the Federal Reserve's downwardly adjusted estimate released last week.
Crutsinger's story, ultimately time-stamped at 2:53 p.m., acted as if that 2 percent figure reflects current expectations for the first quarter. It doesn't. He also avoided mentioning the size of the four-month durable goods decline cited above, and (of course) partially blamed the weather for the current circumstances:
US DURABLE GOODS ORDERS STUMBLED IN FEBRUARY
Orders to U.S. factories for long-lasting manufactured goods fell in February, the latest installment of disappointing data this quarter that suggests the economy has hit a soft patch.
The weaker-than-expected performance is pushing economists to downgrade their growth forecasts for the January-March period. But they blame temporary factors for the slowdown, including severe snowstorms and West Coast port disruptions, and have brighter hopes for the spring.
The Commerce Department reported Wednesday that orders for durable goods dropped 1.4 percent in February, disappointing economists who were looking for a small increase. The decline was the third drop in the past four months and January's increase, previously reported as a 2.8 percent gain, was revised down to a more moderate 2 percent.
... The weakness in February was widespread, with falling demand for commercial aircraft, autos and machinery. The result follows a slew of underwhelming results from recent economic indicators, such as three months of declines in retail sales to a big drop in home construction in February.
Michael Feroli, chief economist at JPMorgan Chase, on Wednesday lowered his forecast for growth in the January-March quarter to 1.5 percent, down from 2 percent previously.
But Feroli said he expects a rebound growth to rebound to 3 percent in the second quarter and hit 2.7 percent for the full year, up from last year's 2.4 percent gain.
... The government will release its third and final estimate of economic growth in the fourth quarter on Friday. Analysts expect growth will be revised slightly to a rate of 2.4 percent, up from the previous estimate of 2.2 percent. But that would still leave the economy expanding far below the 5 percent rate in the third quarter. And economists believe growth has remained sluggish in the current January-March period at around 2 percent.
So Crutsinger quoted one guy who though the first quarter will come in an an annual rate of 1.5 percent. (He also didn't introduce the word "annual" into his piece until two paragraphs later, so many readers may erroneously believe that the 1.5 percent is a single quarter's growth, which would translate into over 6 percent for a full year.) Later, he claimed that "economists" believe that it will come in at an (annual rate of) "around 2 percent."
I guess it depends on what you mean by "around," given that over an hour before the final time stamp of Crutsinger's report, EFX News reported that:
Economists at Barclays cut their Q1 U.S. GDP tracking estimate to just a 1.2% growth rate, from 1.3%. Economists at Morgan Stanley cut Q1 GDP tracking by 0.3 point to a 0.9% increase. And Goldman's team cut Q1 US GDP tracking by 0.2 point to 1.8%.
Additionally, earlier today:
- The Federal Reserve Bank of Atlanta lowered its first quarter estimate from 0.3 percent to 0.2 percent.
- Moody's High Frequency GDP model was revised down to 1.0 percent.
In other words, Marty, quite a few economists were already estimating well below 2 percent even before today's durable goods report, and now they're even lower. You're welcome to try to cite several forecasters who are keeping up with current events who are estimating above 2 percent to offset the half-dozen examples cited here (the Chase person he reported plus the five I identified).
Good luck. But if you can't — or won't — it will prove that you deliberately sandbagged your readers about how weak the economy is overall.
Shame on you.
Cross-posted at BizzyBlog.com.
