Each month we at NewsBusters wonder how the recession will be spun anew, and each month news outlets act with increasing hilarity.
First up for April was an earnest little piece by USA Today writer Matt Krantz published Thursday. Krantz insisted on reporting "optimism" and "confidence" in the economy thanks to a phantom supply of "new jobs."
Just one little problem, though: Thursday happened to be the same day the Department of Labor announced a surge in unemployment claims that hampered the stock market.
But no matter to Krantz. You see, Krantz wasn't talking about new jobs that actually existed - he was celebrating an announcement from two companies that they would be strong enough to hire a few people sometime in the future.
Krantz began with the headline "New Jobs Fan Rising Economic Optimism" and then waited five paragraphs to explain where those jobs were (emphasis mine, h/t NB reader Kara Kittle):
A hint of good news on one of the biggest question marks hanging over the economy - jobs - added to Wall Street's growing confidence Wednesday that the recovery is firmly on track.
The Dow Jones industrial average notched its third consecutive close above 11,000, rising 104 points to 11,123 as stocks climbed further into territory last seen before the financial crisis.
Wednesday's rally came despite Federal Reserve Chairman Ben Bernanke saying the recovery remains moderate. Economic reports were mixed.
The initial spark for the advance came as JPMorgan Chase and Intel reported earnings that topped expectations as Wall Street heads into the thick of the first-quarter earnings season.
The earnings themselves were enough to fan optimism. JPMorgan's profit rose 57% to $3.3 billion and Intel's rose 288% to $2.4 billion. The two industry bellwethers said they were going to add jobs - 9,000 for bank JPMorgan and 1,000 for chipmaker Intel. Granted, those numbers are small in the context of the millions of Americans out of work. Nonetheless, even a whiff of rare good employment news was enough to bolster Wall Street's increasingly optimistic mood. "The one thing that's been missing are the jobs," says Jim Paulsen of Wells Capital Management.
A promise of 10,000 jobs is indeed good news. But how serious of a promise is it, and when will it come to fruition? This NBer had to use a bit of elbow grease to find the answer, but eventually this dispatch from CNN Money provided a clue:
The company also reiterated that it planned on adding 9,000 jobs in the U.S. across a number of different areas, including its private and retail banking businesses, hinting that it is priming itself for growth. The firm however, did not provide a time frame as to when those workers would be hired.
JPMorgan's latest results extend the good fortune the firm has enjoyed throughout the crisis. Unlike many of its peers, the bank has managed to stay profitable over the past two years.
So basically, a company that's been turning a profit all along made a vague promise to hire people on some unknown future date - and USA Today was already pouring champagne.
While USA Today was busy talking about "Wall Street's increasingly optimistic mood," some outlets were more sober. The Christian Science Monitor warned that "the real economy" did not seem to reflect the stubbornly upbeat forecasts coming from experts. The Associated Press also admitted that "jobs are still hard to come by" no matter how many pundits say otherwise.
For those of you asking yourself the obvious question..no, USA Today did not celebrate such mediocrity under President Bush.
Back in the dark days of 2006 when unemployment was horrifically hovering at 5%, USA Today told its readers not to be fooled by silly things like profit:
"The public mood is very apprehensive," says Jim Owens, CEO of Caterpillar, noting that though spending is healthy, people are carrying high debt and are worried about oil prices, international strife and other factors.
"Business executives are looking at some pretty strong profits, strong global (economic) growth," says Owens, whose company posted robust earnings in the second quarter. "We're in a world today of relatively low inflation, relatively low interest rates for this stage of the business cycle" and pent-up demand for capital investment, which yields a strong outlook.
Why the wide range of views? One reason is the inherent difficulty in forecasting at turning points in the economy. More narrowly, the differences hinge on how economists, executives and consumers gauge key economic factors: the depth and breadth of the housing decline, the outlook for oil prices, the pace of economic growth abroad and whether inflation has spread beyond energy prices.
How strange none of that stuff made it into the paper's coverage in 2010. Do people somehow not have as much debt now? Is expensive oil somehow not a threat anymore? Are global affairs somehow less worrisome? And what about "the inherent difficulty" of reading economic tea leaves - did all of those conflicting factors somehow disappear?
In less than four years, the media's treatment of hard news has changed that much. In 2006, "strong profits" and "robust earnings" were not enough to overcome fear of international politics. In 2010, two profitable companies promise to hire a few thousand people, and that's more important than an unexpected rise in unemployment.
Perhaps part of the reason for such cheerful reporting is how the Obama administration spins the news when talking to journalists. Instead of just accepting bad news as being what it is, government officials fed some very strange excuses to the media this week.
The Wall Street Journal passed on a sample of this Thursday:
In the U.S., investors were disappointed Thursday morning after the Labor Department said in its weekly report that initial claims for jobless benefits rose by 24,000 to 484,000 in the week ended April 10, marking the second-straight week of increases in initial claims. Economists surveyed by Dow Jones Newswires had expected a drop of 15,000.
However, a Labor Department economist said this latest rise can be pegged to lag effects from the spring holidays, including Easter and Cesar Chavez Day, which is celebrated in worker-heavy California.
You read that correctly: the state of California observed March 31 as a holiday to honor union activist Cesar Chavez, and the federal government blamed it for a nationwide slump two weeks later.
Oh, and Easter caused a lag effect too - except for the fact that, just a few days ago, the media were hyping good retail sales during Easter weekend.
So one of the busiest shopping days of spring helped several stores beat estimates, and then this mysteriously caused people to be unemployed a week later.
Back in March when the Obama administration blamed job losses on a snow storm, many of us thought they'd scraped the bottom of the barrel. But now we see that barrel goes a lot further down.
Up next: blaming the recession on a miserly tooth fairy that won't leave enough money under the pillow.
Go ahead and laugh about it now: you'll likely cry when you see USA Today actually fall for it.