The government's report on consumer spending released this morning was another disappointment. Seasonally adjusted spending increased by just 0.1 percent, falling short of modest expectations of a 0.2 percent jump, following 0.2 percent declines in both December and January.
The opening paragraphs of coverage at Bloomberg News and the Associated Press contrasted sharply. Longtime readers can probably guess which wire tried to portray the news more positively. Predictably, both outlets broke out the bad weather excuse.
Here's the unbylined opener at Bloomberg:
Consumer Spending in U.S. Rose Less Than Forecast in February
Consumer purchases rose less than projected in February, indicating the biggest part of the U.S. economy will find it hard to sustain momentum after the best quarter since 2006.
Now let's see how the AP's Martin Crutsinger began his writeup:
US CONSUMER SPENDING EDGES UP 0.1 PERCENT IN FEBRUARY
U.S. consumers spent just slightly more in February even though their income rose by a healthy amount. But economists hope bigger paychecks will give spending a bigger boost in the coming months.
So Bloomberg identified concerns about "sustain(ing) momentum," while Crutsinger sold "hope" that decent gains in real income will a) continue, and b) lead to higher spending.
Both outlets rolled out the weather excuse for the poor reading:
(Bloomberg)
Frigid temperatures and snow in much of the Northeast and Midwest last month emptied malls and auto-dealer lots as Americans huddled at home to keep warm. While warmer weather may bring out shoppers, steady gains in payrolls have yet to foster bigger wage gains, which would help bolster spending.
(Associated Press)
Severe winter weather kept shoppers away from the malls and auto showrooms in both January and February.
... The weather-related weakness is expected to dampen overall economic growth during the January-March quarter, with many economists forecasting growth to slow to around 1.5 percent during the quarter. But analysts are also optimistic for a rebound in coming quarters to growth of 3 percent or better.
Crutsinger's 1.5 percent quote for the first quarter — an annualized figure, which the AP reporter failed to note — is on the high end of most published predictions, which are currently ranging from 0.2 percent (Federal Reserve of Atlanta) to 1.7 percent (Macroeconomic Advisers, as reported on Friday by Crutsinger in his objectively false report about how "durable" the economy has been).
Today, the usually overoptimistic folks at Moody's Analytics lowered their first-quarter growth estimate to an annualized 1.0 percent.
Finally, for comic relief, Crustsinger actually found a guy claiming to be an expert who claims that the job market is "on fire":
"Households are still flush with the money saved from the big drop-off in gasoline prices and, with the labor market still on fire, incomes should continue to increase at a solid pace," said Paul Ashworth, chief U.S. economist at Capital Economics.
I believe Mr. Ashworth is confusing the "job market," which will never be "on fire" as long as millions who would like to work sit on the sidelines, with the pants he is wearing, which apparently are burning out of control.
Cross-posted at BizzyBlog.com.
