After downplaying bad economic news for months, the broadcast networks continued their head-in-the-sand approach once again.
The Bureau of Economic Analysis (BEA) revised earlier growth estimates sharply downwards. It announced on June 25 that found the U.S. economy actually shrank at an annual rate of 2.9 percent during the first three months of 2014. Despite this grim statistic, only CBS’ “Evening News” covered it, of all the broadcast network morning and evening news shows in the first 24 hours after the data was released.
CBS only spent one minute and five seconds on the news. It worked desperately to find a silver lining, predicting “brighter days ahead” and a “strong rebound in the second quarter.”
Anthony Mason, senior business and economics correspondent, pointed out that it was the “worst quarter since 2009.” The first estimate, on April 30, found that economic growth had declined from 2.6 percent in the fourth quarter of 2013 to an estimated 0.1 percent for the first quarter of 2014. That was already revised downward to -1.0 percent on May 29.
On June 25, CBS dismissed the troubling estimate, pointing to strong jobs, housing data and auto sales for the next quarter. Mason assured his audience that, “the latest numbers suggest we’ve had a strong rebound in the second quarter which ends Monday.” While Mason admitted the economy was “vulnerable,” anchor Scott Pelley said, “but brighter days ahead at the moment.”
CBS previously tried to spin the bad GDP number on May 29, when Mason also assured viewers “it sets the economy up for rebound this quarter and there are some encouraging signs in the numbers.”
While this weak growth does not guarantee another recession, it underscores the already weak economy recovery under President Barack Obama. The June 25 Investors Business Daily (IBD) said, “we’ve heard this ‘prosperity is just around the corner’ promise countless times since President Obama took office, only to see it vanish once the corner is turned.”
IBD connected the drop to the overall weakness of the Obama recovery. It wrote that the recovery’s increase in GDP has been “less than half the average growth rate for every other economic recovery since World War II.”
The Wall Street Journal collected reactions to the GDP drop from various economists calling it “Different Shades of Nasty.” Some, like Jim O’Sullivan of High Frequency Economics, said “GDP was recession-like in Q1, although most other data clearly signal that the decline in an outlier.”
Gus Faucher of PNC Financial Services blamed “A number of factors” including a “difficult winter” for the downgrade. Guy LeBas of Janney Montgomery said this was “Ugly/Ugly: I think we can all recognize the first quarter was ugly.” LeBas said the more important question was, “What does this number say about the second quarter?”