For almost two years since the current economic expansion began to really pick up steam, impartial economists worldwide have been wondering why so many Americans seem to not believe that a recovery is even transpiring. Unfortunately, the cover-story of the Washington Post’s business section on Saturday, August 6, gives us all a perfect example of why this disconnect between perception and reality exists.
On the surface, this story was seemingly intended to address the absolutely fabulous employment report that was released by the Bureau of Labor Statistics last Friday. However, given the party currently in power, the Post obviously felt it was more important to rain on what should have been a very delightful parade rather than stick to the facts imparted by this monthly employment survey.
Mercifully, the opening three paragraphs of this diatribe that appears to be more editorial than anything resembling a serious business piece aptly prepares the reader for the almost suffocating Chicken Little motif:
U.S. job growth jumped last month and the unemployment rate held steady at 5 percent, the government reported yesterday, the latest economic data to show the economy picking up steam.
Yet President Bush's economic approval ratings remain low, weighed down by anger over Iraq and concerns about lackluster wage increases and stubbornly high gasoline prices.
"I feel the economy is just not as good as it should be," said Adam Judis, 40, a Pasadena, Calif., computer consultant and political independent. "We're spending too many lives, resources and money on Iraq. There has to be a point where we say we can't help everybody. We need to help ourselves.”
Imagine that: This is a BUSINESS section of a major American newspaper, and in the second paragraph of an article that is supposed to be discussing our nation’s employment condition, the authors are addressing the country’s anger over the war in Iraq!
What does that have to do with business, the economy, or the labor market?
For those who don’t spend every waking moment trolling serious business periodicals for the latest scraps from Wall Street, economic articles typically quote the opinions of analysts and economists concerning data just released.
However, for a reason that is significantly more transparent than the publishers of this daily seem to recognize, their authors chose to quote a computer consultant who didn’t have anything to say about these employment figures -- or anything at all related to the economy for that matter -- but instead wanted to voice a negative opinion about the war.
Isn’t that special?
Maybe most important, it took these authors until the fourth paragraph for them to actually share any of the really compelling statistics from this report with their readers.
And this is the BUSINESS section?!?
Not to be distracted from the mission at hand, having spent a few seemingly inconsequential paragraphs on the extremely strong data imparted by this report, the authors quickly got back on script by referencing a new poll out suggesting that the American people aren’t happy with the president’s economic performance.
Then, they moved on to an interview with a man in Austin, Texas who has been unsuccessfully looking for a job for three years, and put us all out of our misery with this conclusion:
Peg Dameron, 51, a Republican nurse in Guilderland, N.Y., said she voted for Bush in 2000 but is disenchanted over Iraq, health care issues and a failure to raise the minimum wage. "We're just belittling the poor," she said.
Of course, nowhere in the article did the authors discuss Wall Street’s reaction to this report -- which they must have felt would have been inappropriate for the business section! -- or how interest rates shot up immediately after its release due to analysts’ expectations that the Federal Reserve is going to have to raise borrowing costs more than had been hoped to prevent this very strong labor market from rekindling inflation.
And, even when they did actually address the economy in this supposed “business” article, these authors typically got that wrong, too.
For instance, in the previously referenced second paragraph, the term “lackluster wage increases” is thoroughly erroneous. In fact, the BLS’s news release specifically stated that: “Average weekly earnings increased by 0.4 percent over the month to $543.58. Over the year, both average hourly and weekly earnings grew by 2.7 percent.”
Almost unbelievably, the authors actually DO cite this statistic nine paragraphs later, and in doing so, thoroughly contradict their “lackluster” depiction:
Average hourly wages for most workers rose 6 cents in July, to $16.13, the biggest monthly increase in a year, the Labor Department said.
Amazing! In paragraph two, wage gains are lackluster. But, in paragraph eleven -- where no conscious soul ventures without a chaperone -- they’re the largest in a year. How can that be?
Of course, if the authors had put this fabulous news in the opening few paragraphs where it belonged, this article might have accurately depicted another in a long line of truly stellar economic reports.
But that’s not the point, is it?