Bob CollinsI’ve written in the past about how most economic news seems to revolve around a basic fact that experts got something wrong. They do so with alarming frequency.
If the market collapses today, it’s because someone’s earnings didn’t meet expectations. When the unemployment rate is news, is when it is above or below what was expected. Maybe the problem is the expertise.
In the age of the talking head, news organizations do us no favors by framing stories around things that might happen, but usually don’t.
Today provides a perfect example:
Remember how the economy was sinking during the summer and we might end up in another recession?
Today, there’s this classic first paragraph of a story from the Associated Press:
The U.S. economy grew at a 2.7 percent annual rate from July through September, much faster than first thought.
A swing and a miss. But don’t let that stop you, AP…
The strength is expected to fade in the final months of the year because of the impact of Superstorm Sandy and uncertainty about looming tax increases and government spending cuts.
Today, according to an AP story on the MPR website, there is also disappointment over November retail sales. The experts got their hopes up because of the reports of gargantuan crowds at after-Thanksgiving sales.
The disappointing November sales releases dampened the enthusiasm fueled after reports of strong spending over the Thanksgiving weekend. A record 247 million shoppers visited stores and websites over the four-day weekend starting Thanksgiving, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for The National Retail Federation trade group. Americans spent more too: The average holiday shopper spent $423 over the entire weekend, up from $398. Total spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.
But as Barry Ritholtz at Big Picture noted yesterday — and I forwarded on 5×8 yesterday — the yardstick the enthusiasm was based on is a bogus marketing gimmick which the economic reporters ignore for the sake of a story.
It is my assumption that the NRF propaganda is an attempt to create an environment of social pressure: EVERYONE is shopping, so you better get out there and shop too! Only one hopes the media would do a better job of checking that. Only they don’t. The media’s job should be to inform — not MISINFORM — their readership. On Black Friday reporting, they are failing miserably.
Economics, they say, is the inexact science. It’s often also the inaccurate story.
