Perhaps using a preemptive strike to help combat the May jobs report to be released on Friday, MSNBC has already found an excuse for lost jobs, and an increased unemployment rate – storms, tornadoes and flooding. According to a business report:
“…homes or places of business have been destroyed in this year's wave of storms, tornadoes and flooding. That means thousands of workers in the South and Midwest could be out of work for some time, potentially pushing up the nation's jobless rate and further taxing financially strapped state unemployment funds.”
Yet in 2004, when reporting on an October jobs report in which hiring had increased at the fastest pace in seven months, MSNBC somehow managed to find analysts who said the jump in hiring was due mainly to another form of natural disaster – hurricanes. The business report at that time read:
“Some analysts were skeptical about the latest surge of hiring, pointing out that much of the unusually large jump in October stemmed from cleanup and rebuilding in Florida and other states that were ravaged by four hurricanes…”
That assessment is buoyed by an accompanying CNBC video (seen below) in which Senior Economics Reporter, Steve Liesman, asks President Bush’s economic advisor, Gregory Mankiw, about the ‘Hurricane Effect’ on a jobs report.
Liesman: The concern here is that there was a lot of hurricane related with bounce back from September and a lot of construction related activity that added to jobs in October. Greg, take a step back from the number, the 339,000, where is the trend as far as you can tell?
Considering the devastation and destruction wrought by the recent spate of tornadoes, would there not be an uptick in construction related activity as well?
MSNBC followed that report with another forecast on job growth in November of 2004, which anticipated glowing numbers due to a ‘post-hurricane rebound’. That report read:
“Economists, who have been burned over the past few months by reports that fell short of expectations, are once again looking for a solid report, partly because of an expected rebound after four hurricanes tore through Florida and other southern states in August and September.”
That said, the biggest contradiction to the aforementioned ‘tornadoes wipe out jobs’ report may have come from an AP article run on the MSNBC site itself just four days ago. The headline?
Natural disasters probably won't bruise US economy
That piece stated:
The tornadoes and floods that have devastated parts of the South and Midwest have also hammered the local economies — flooding farmlands, suspending factory work and disrupting energy production.
Yet for the U.S. economy overall, the damage will likely be scant. At most, the disasters might knock one-tenth of 1 percentage point off national economic growth in the April-June quarter, Wells Fargo economist Mark Vitner estimates.
"It's so small, you aren't going to notice it," said Patrick Newport, an economist at IHS Global Insight.
Also of interest is the next sentence which reads:
Others caution, though, that the tornado season hasn't ended yet, and the hurricane season has yet to arrive. Further major disasters could begin to weigh on the U.S. economy.
So in the view of MSNBC, hurricanes and natural disasters in 2004 actually helped to create jobs, while in 2011 they will likely eliminate jobs. What’s the biggest difference leading to two very contradicting conclusions in these jobs reports?
Who was running for re-election in October of 2004, and who is running for re-election now?
Rusty can be contacted at The Mental Recession