Ever since the White House changed hands almost seven years ago, press reports on the U.S. economy have annoyingly overaccentuated whatever positives reporters might find (or think they have found), while ignoring glaring negatives and omitting key items.
One example of such biased reporting came from the Associated Press's Martin Crutsinger on Wednesday. In covering the Census Bureau's October Durable Goods report, Crutsinger praised its one-month seasonally adjusted increases in new orders and shipments. While that news was welcome, the AP reporter ignored the ugly fact that October's actual (i.e., not seasonally adjusted) year-over-year figure was lower than October 2014, marking the seventh straight month of year-over-year declines. He also didn't address shipments, which have been flat compared to to the same month last year for the past four months, at all.
Finally, even though he separately covered the government's awful income and outlays release Wednesday and characterized its reported increase in consumer spending as "modest" and "weak" (as I noted in an earlier NewsBusters post today), Crutsinger somehow wrapped his durable goods coverage by claiming that "consumer spending ... has remained strong this year."
Here are the first four paragraphs from Crutsinger's writeup, followed by his absurd wrap-up (bolds are mine):
ORDERS FOR US DURABLE GOODS RISE STRONG 3 PERCENT IN OCTOBER
Orders for long-lasting manufactured goods posted a solid gain in October after two months of weakness, while a key category that tracks business investment plans advanced by the largest amount in three months.
Orders for durable goods rose 3 percent in October following declines in both September and August, the Commerce Department reported Wednesday. The strength was led by a surge in demand for commercial aircraft but reflected widespread gains in a number of categories, from machinery to computers. A key category that serves as a proxy for business investment spending rose 1.3 percent in October, the best showing since July.
American manufacturers have struggled this year with weakness in many key export markets and a strong dollar, which makes U.S. goods less competitive.
Reflecting the struggles manufacturers have faced this year, total orders for durable goods, items expected to last at least three years, were down 4.2 percent for the 10 months ending in October, compared to the same period a year ago.
... The hit to the U.S. economy has been softened by the fact that consumer spending, which accounts for 70 percent of economic activity, has remained strong this year.
As noted above, the current month's news was relatively welcome, but it hardly made up for the 11 months which preceded it. One could easily interpret Crutsinger's fourth paragraph as indicating that October was the end of the line for troubling declines in orders. Too bad that the detailed data (adjusted for Wednesday's revisions to September) says it isn't so:
Seasonally adjusted orders (top table with red boxes) in October barely came in ahead of October 2014 — which is odd, because not seasonally adjusted orders (bottom table, blue boxes) trailed October 2014 by 1 percent. Additionally, year-over-year not seasonally adjusted orders have trailed the same month in the previous year for the past seven months. Zero Hedge believes that this condition indicates that a "Recession looms." Well, maybe or maybe not, but the real situation certainly make a mockery of Crutsinger's relatively cheery writeup.
The news isn't much better in shipments (also adjusted for Wednesday's revisions to September):
Both seasonally adjusted and actual shipments from July through October have been almost or completely flat (up 0.27 percent and down 0.04 percent, respectively). Readers should also note the seasonally adjusted swing from a 1.0 increase in September to an October decline of 1.7 percent. This does not bode well for future months.
Crutsinger's final statement on consumer spending was shaky even before the government released its October Personal Income & Outlays report on Wednesday. After its release, his contention is delusional. The report shows that real, inflation-adjusted spending is up by only 0.86 percent in the past five months — an annual rate of roughly 2.0 percent. That result, if posted for a full year, would be the 14th-worst result in the 68 years. It would also be roughly equal to the pathetic average during the past five full calendar years of the Obama administration's alleged "recovery." In other words, it's not "strong" in any sense.
All of this begs an obvious question, which hasn't yet been answered: If sales, shipments and orders in this area and others are flat or declining, and consumer spending really isn't strong, how can the economy continue to sustain even the 2.0 percent annual growth policymakers appear to have tragically decided is the best we can do?
Cross-posted at BizzyBlog.com.
