Man Without Qualities

Thursday, November 20, 2003

If Leading Indicators Go Up And Jobless Claims Dip, But The Media Pay Little Attention...

... does it all have a political impact anyway?

Yes. But the ever-more-willfully coccooning mainstream media will be the last to know. A few weeks ago, when the economic news was bad - or, rather, when the mainstream media thought the news was was bad - it appeared in the front page headlines many days. Not now. Now we're lucky if the news shows up on the front of the business section.

In today's under-reported news from the Associated Press (news for which the New York Times, for example, has no space - even on its Business Page - because it's busy running articles on currency trading fraud and a $13 million mutual fund irregularity - yes, that is million, not billion):

The Conference Board reported that its closely watched Composite Index of Leading Economic Indicators rose 0.4 percent in October, suggesting stronger economic activity in the coming year.

The Labor Department said that for the week ending Nov. 15, new claims for jobless benefits declined by a seasonally adjusted 15,000 to 355,000. For seven straight weeks claims have been below the 400,000 mark, suggesting that the job market is turning a corner. Fewer than 400,000 new claims is generally thought to lead to a lower unemployment rate, and 355,000 is for these purposes well below 400,000. Also, the 355,000 number was stronger than the forecast fall to 366,000 - a fact that the AP itself does not even bother to report (but you can find in the Financial Times, or the Wall Street Journal, for example).

The October rise in the Conference Board index was twice the 0.2 percent increase most analysts had been forecasting. The upticks in the employment news and the Conference Board index continue a recent string of forecasts that have proved to be less optimistic than the economy's actual results. The U.S. economy is estimated to have grown at a 7.2 % annual rate in the third quarter of this year, and most economists believe growth will be a respectable 4 percent in the October-December period. But in the third quarter unexpectedly depleted and unrestored inventories knocked quite a bit off that 7.2% growth rate. If inventories had been restored, the estimated rate of third quarter growth would have about 8.1%. I wouldn't take that 4% fourth quarter forecast too seriously just yet.

"There's been a steady stream — rather than a trickle — of good news," said Tim O'Neill, chief economist for the Bank of Montreal and Harris Bank in Chicago. "We're probably headed toward a torrent over the next few months."

In which case perhaps the mainstream media can choose to ignore the torrent on the theory that it's not "news" because its become just more of the same.

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