Weathermen can be wrong, and so can economic forecasts.
The Labor Department reported May 2 that there were 20,000 jobs lost in April and the national unemployment rate fell to 5 percent from 5.1 percent the month before. But before Labor Department numbers came out, surveys among many news organizations were downbeat in their predictions, saying that there would be around 75,000 jobs lost in April and an uptick in the unemployment rate to roughly 5.2 percent.
After adjusted numbers came out there were losses of 76,000 jobs in January, 81,000 jobs in March, and 83,000 in February, meaning a 20,000 loss – while not good – was much better than expected.
Ahead of GDP numbers, NBC “Nightly News” anchor Brian Williams on April 29 reported, “When asked if we’re in a recession, 81 percent [of Americans] say yes, 15 percent say no,” blaming Americans’ opinions of the economy on record gasoline prices, high rates of foreclosure and student loan debts.
The CBS “Evening News” on April 29 prepared Americans for the possibility of negative growth in the first quarter with stories of financial struggles.
Proposing that the next president may be “inheriting a lot of economic headaches,” Katie Couric turned to Jim Axelrod to spotlight oil profits amidst coverage of rising gas prices.
Some journalists are forgetting to put economic indicators in context.
The Department of Commerce announced April 30 that the gross domestic product (GDP) in the first quarter of 2008 grew at a seasonally adjusted annualized rate of 0.6 percent, the same as the fourth quarter of 2007.
Some sectors that posted job losses in previous months, like business and professional services, grew by 39,000 jobs after a loss of 44,000 in the previous month, according to CNN Money. Even the financial sector, which has been dealing with shaky credit markets, had a 3,000-job gain after eight months of losses.
"It's hard to get real upset about 95% employment, given everything else going on with the credit markets and energy prices," Tig Gilliam, CEO of Adecco Group North America, told CNNMoney.
An editorial in The New York Sun May 1 was matter-of-fact about the economy pointing out that April 30’s numbers were “a real rate of growth, which means that the economy grew faster than inflation, which was itself not negligible.”
“We'd like to see stronger growth,” said the Sun, “But two consecutive quarters of 0.6% growth is not bad, when measured against, say, the fourth quarter of 1990 and the first quarter of 1991, when real GDP shrank at an annualized rate of 3% and 2% ... Another genuinely bad patch was in spring and summer of 1980. In the second quarter of 1980, growth was negative 7.8%.”
“We couldn't possibly be cheered by a report that shows a decline in job creation," White House spokesman Tony Fratto told Reuters May 2. When pressed about whether the Bush administration would classify the economy as in recession, Fratto responded: “The evidence of one isn't there so far."