The next time I plan to escape reality for an extended time, I won't go to the trouble of forwarding the phones to voicemail and swearing off the Internet and TV for a few days. I'll just take whatever the Associated Press's Martin Crutsinger must be consuming.
Crutsinger's 11:45 report this morning claims that "The better-than-expected retail sales report is the second strong signal on the economy in as many days." Strike 1: It was far from unanimously considered better than expected. Strike 2: It wasn't that strong regardless, considering that it was likely achieved on borrowed money. Strike 3: The report that he thinks was strong yesterday wasn't strong either. You're out, bud. Oh, and there's Strike 4 in reserve: Though he referred to consumers being "a little more confident," Crutsinger "somehow" ignored (and AP on the whole almost completely ignored) a devastating report showing consumer sentiment at a three-decade low released well before the time stamp of his report.
Here are several paragraphs from Crutstinger's creative excess (bolds and numbered tags are mine):
Retail sales rose 0.5 percent in July
Consumers spent more on autos, furniture, clothing and gas in July, pushing up retail sales by the largest amount in four months. The gain signaled that Americans are a little more confident [1] in the economy and could helped (sic) dispel fears that the country is headed for another recession.
Retail sales rose 0.5 percent last month, the Commerce Department said Friday. It was the best showing since March. The government also revised sales higher in the previous two months.
Even after excluding sales at gas stations, which were influenced by an increase in gas prices, sales rose 0.3 percent last month.
The better-than-expected retail sales report [2] is the second strong signal [3] on the economy in as many days. Stocks rose in early trading. The Dow Jones industrial average gained 120 points.
... "Don't write off the American consumer or economy just yet," said Sal Guatieri, senior economist at BMO Capital Markets. "The solid July retail sales report should help allay recession fears."
... data for July suggest the economy may be in better shape than some had feared. Layoffs are down [4], retail sales are up and gas prices are falling. Employers added 117,000 net jobs last month. That's not enough to significantly lower the unemployment rate [5], but it was a notable improvement after two dismal months of hiring.
Notes:
- [1] -- How interesting that Crutsinger would mention confidence so early in his report, especially since its time stamp was well after the morning release of the latest Thomson/University of Michigan Consumer Sentiment survey. Consumer confidence fell to its lowest level since May of 1980, some of the worst days of the Carter administration. That was the 40th full month of Jimmy Carter's presidency; we're only on Month 31 under Obama.
- [2] -- Though the positive number was nice and the prior-month revisions were also helpful, the report was not clearly "better than expected." My Business Insider e-mail this morning carried a prediction of +0.6%. After the report's release, MarketWatch said that expectations had been 0.7%. Last time I checked, +0.5% is not as good as +0.7%. The Wall Street Journal's coverage described the report as "positive," which it was (which is not the same as "strong"), but didn't state what expectations were. Another reason to temper the enthusiasm is that the gains in retail sales may have been achieved on borrowed money. Last week, Crutsinger himself (not kidding) reported that consumer borrowing in June was up by the most in four years.
- [3] -- Showing that fudged media reports on the economy have a cumulative effect, Crutsinger seems to think, though he didn't cite it specifically, that yesterday's report on initial unemployment claims from the Department of Labor was "strong," apparently because AP colleague Daniel Wagner said so (covered at NewsBusters; at BizzyBlog). If there's another report from yesterday besides that one which was positive enough to matter, I don't see it here. Unrevised claims dropped by only 5,000, or 1.25%, from the previous week's unrevised claims, and it a near certainty that yesterday's number will be revised upward as has been case in 21 of the past 22 weeks. The change is in the right direction, but calling it "strong" is absurd.
- [4] -- If Crutsinger is referring to unemployment claims as a proxy for "layoffs," as just noted, the improvement isn't impressive. If he's thinking of some other metric, possibly related data that I was able to locate was either unconvincing or contradictory.
- [5] -- Crutsinger is mixing apples and oranges. The 117,000-job July improvement, obtained from the Establishment Survey, is unrelated to the unemployment rate, which is determined from the Household Survey. According to the Household Survey, the number of people employed went down by 38,000. The unemployment rate did tick down, but only because the labor force shrunk by 193,000.
Not only did Crutsinger ignore the consumer sentiment report, but AP on the whole almost completely did the same. Though the report was covered in dedicated articles at Bloomberg and Reuters (which changed its initial headline from "Consumer Sentiment Tumbles to Historic Low" to "Consumer Sentiment Tumbles in August"), the AP as of mid-afternoon had only mentioned it in a single paragraph in a much longer report on today's stock trading.
This is another in a long list of examples of the approach of much of the establishment press towards economic news during a Democratic presidential administration: Maximize (or create) the good news, and minimize the bad.
Memo to Marty: Please let us know what you're taking that enables you to avoid reality so successfully. I'm afraid we're all going to need a lot of it to get through the time between now and January 20, 2013.
Cross-posted at BizzyBlog.com.
