With food inflation growing at an ever-increasing rate, things may be bad. But they aren’t as bad as the “CBS Evening News” made them seem.
Even with the economy at a slow rate of growth, consumer spending has increased. But don’t be fooled, warned anchor Katie Couric. It’s food inflation taking its toll on the consumer.
“[T]he government reported today that consumer spending in March shot up twice as much as economists were expecting, and it’s not because we’re buying more – it’s because the prices are so much higher, especially food,” Couric said on the May 1 broadcast of “Evening News.”
But attributing the increase in consumer spending, which is up 0.4 percent according to the Commerce Department – double the increase that had been forecasted by some economists – solely to food inflation is inaccurate.
“The first notion that somehow you could explain the entire increase in consumer spending is due to higher prices – if you double consumer spending, the only way that statement would make sense is if the price level doubled in a month,” economist and Business & Media Institute adviser Dr. John Lott said.
Couric cited a U.S. Labor Department statistic that food prices have increased “at an annual rate of more than 5 percent.” However, CBS correspondent Mark Strassmann reported only on food items with much more significant increases.
“Just in the last year, prices of America’s food staples have skyrocketed,” Strassmann said. “Flour now 49 cents a pound, is up 36 percent; eggs at $2.20 a dozen, up 35 percent; milk – $3.78 a gallon, up 23 percent; and pasta at $1.08 a pound, up 19 percent. Fruits and vegetables are also up double digits.”
But as Lott pointed out, the segment didn’t look at the whole picture, and that distorts the reality of food inflation.
“When you’re talking about all food, you’re not spending it all on pasta,” Lott said. “Some portion of it is going up, but oranges have fallen by like 35 percent. You have drops in the price of lettuce and other things, too. And the average on the course of a year is going up about 5 percent – that’s the relevant number, what’s happening overall with the cost of food, not particular parts of the basket because nobody goes and spends on just those things that are going up.”
Journalists’ approach is similar to the way they have reported gas prices – showing the extremes to portray a more severe crisis. A 2007 report by the Business & Media Institute showed how the three major networks regularly hyped the rising cost of gasoline by highlighting the most expensive. This time they’re doing it with food.
“It’s hysterical to go and pick out parts of those parts of the food basket that having been going up a lot and not mentioning other things that have apparently been going down,” Lott added.