This week, the Associated Press wrapped up a year of largely pathetic business reporting with three items exemplifying the wire service's habits of data-twisting, sloppiness, and convenient omissions.
A deceptive AP post-Christmas story pretended that Christmas-season "spending" was twice as high as anyone else has predicted. A report on pending home sales omitted a concerned comment from a normally incurably optimistic economist at the National Association of Realtors. Finally, the AP appears to have ignored today's Chicago manufacturing report from the Institute for Supply Management, even though it came in at a level which has previously foreshadowed a nationwide recession.
On Monday, as noted in a previous NewsBusters post, an unbylined AP report claimed that "spending" during the Christmas shopping season was up by 8 percent — based on a report identifying the number of transactions with no dollar amounts attached. That estimate is not even presentable, let alone credible, and is twice as high as the incurably optimistic National Retail Federation has predicted.
I'm mentioning that Christmas "spending" report again to note that the AP's national site has no other story on overall Christmas season spending (the search was on "holiday shopping" [not in quotes], since, like almost all other news organizations, the AP is quite reluctant to mention "Christmas" in connection with Christmas season commerce). Instead, the wire service ran virtual press releases touting how well Amazon and FitBit did this year. The lack of another story on overall results would seem to indicate that there's a shortage of related good news.
Yesterday, the National Association of Realtors reported that pending home sales dropped a seasonally adjusted 0.9 percent. It was the third drop in four months, and came on top of a previously reported steep drop in existing home sales and weaker than expected new-home sales.
Normally sunnyside-up NAR economist Lawrence Yun, perhaps inadvertently, gave away a level of concern when he said the following:
Lawrence Yun, NAR chief economist, says November's dip in contract activity continues the modestly slowing trend seen ever since pending sales peaked to an over nine year high back in May1. "Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains," he said.
Readers can be assured that if Mr. Yun is acknowledging the existence of "mixed signs of an economy losing momentum," he worried about likelihood of genuine trouble ahead. Of course, the AP's Josh Boak didn't relay Mr. Yun's concern about the overall economy.
Almost on cue, the trouble came today from the ISM's Chicgao Purchasing Managers Index, aka the Chicago Business Barometer, which went completely into the tank (Note: a reading of 50 or more indicates expansion; below 50 means contraction):
The Chicago Business Barometer contracted at the fastest pace since July 2009, falling 5.8 points to 42.9 in December from 48.7 in November.
It has been a volatile year for the Barometer. New Orders and Production have experienced particularly large swings with businesses never recovering fully from a sharp plunge at the beginning of the year.
... Order Backlogs provided a particular drag in December, registering a 17.2 point fall to 29.4. Backlogs have now been in contraction for 11 consecutive months this year and stood at the lowest since May 2009. The double digit move in Backlogs is a rare occurrence and the depth of the decline has only been surpassed by a 17.4 drop in March 1951.
There was also ongoing weakness in New Orders, which contracted at a faster pace, to the lowest level since May 2009.
The only positive this month came from a special question with 55.1% of the panel expecting demand to be stronger in 2016 compared with 14.3% who thought it would be lower. 30.6% of respondents thought demand would be unchanged.
My take on the "special question" is that ISM saw a disastrous report coming and needed something, anything to report which looked at least a bit positive.
The continuation of backlog plunges and the dive in New Orders are particularly telling, because they mean that manufacturers are running out of work to do.
America has never - ever - avoided a recession when Chicago's Business Barometer has collapsed to these levels.
Well, perhaps this time it's different, because manufacturing is no longer as important as it once was. But that doesn't mean that today's Chicago PMI news wasn't worthy of being reported — except, apparently, at the Associated Press, because for all practical purposes, it has become the Administration's Press.
Cross-posted at BizzyBlog.com.