Friday, March 07, 2008

AP Highlights Jobs Cut- Ignores Unemployment Drop

According to an Associated Press report today via Yahoo! News, employers eliminated 63,000 jobs in the month of February- the most in five years. Naturally, the headline at Yahoo! screamed "Employers Slash Jobs by Most in 5 Years". It is in the interests of the national media to make the economic picture seem as bleak as possible- it increases the chances of a Democrat getting elected in November. The reporter, one Jeannine Aversa, writes,
Employers slashed 63,000 jobs in February, the most in five years and the starkest sign yet that the country is heading dangerously toward recession or is in one already.

Unfortunately, for the media, the numbers don't actually play along- unemployment actually dropped despite the job cuts. To Aversa's credit, she included the good unemployment numbers in her second paragraph, thought she seems to feel constrained to paint it in a gloomy manner, writing,
The Labor Department's report, released Friday, also indicated that the nation's unemployment rate dipped to 4.8 percent as hundreds of thousands of people -- perhaps discouraged by their prospects -- left the civilian labor force. The jobless rate was 4.9 percent in January.

Ms. Aversa, this doesn't make sense. If thousands of people left the workforce, how could the unemployment rate drop? If employers cut jobs, one would expect to see the jobless rolls swell. However, this ahas not actually occurred. Therefore, one can reasonably assume that the economy is doing just fine- so fine that it can absorb these job losses without so much as a hiccup.

However, that narrative does not seem to match the national media's preferred scenario. So Aversa continues with the doom-and-gloom pen, writing that,
With the economy losing momentum, fears have grown that the country in on the brink of its first recession since 2001.

Economic growth slowed to a near standstill of just a 0.6 percent pace in the final quarter of last year. Many economists predict growth in the January-to-March quarter will be worse -- around a 0.4 percent pace. Some believe the economy is shrinking now.

Spreading fallout from the housing and credit debacles are the main factors behind the economic slowdown. People and businesses alike are feeling the strains and have turned cautious. Adding to the stresses on pocketbooks, budgets and the economy: skyrocketing energy prices. Oil prices have set a string of record highs in recent days. Gasoline prices have marched higher, too.

To help shore up the economy, Federal Reserve Chairman Ben Bernanke signaled last week that the central bank is prepared to lower interest rates again. Economists predict another cut on March 18, the Fed's next meeting. The Fed, which has been slicing the rate since September, recently turned more forceful. It slashed the rate by 1.25 percentage points in the course of just eight days in January -- the biggest one-month reduction in a quarter century.

The White House and Congress, meanwhile, speedily enacted an economic relief package, including tax rebates for people and tax breaks for businesses. That -- along with the Fed's rate cuts -- should help give a lift to the economy in the second half of this year, says Bernanke.

Still, unemployment is expected to move higher this year. The Federal Reserve predict the jobless rate will rise to as high as 5.3 percent in 2008. Last year, the unemployment rate averaged 4.6 percent.

All the economy's troubles are putting people in a gloomy mood.

If the press had reported the economy accurately for the past six years, I suspect people might not be in such a gloomy mood. If the press could put the US economy in perspective- for example, comparing our economy with that of say, Germany or France or any other country in Europe, people might realize that things are not as bad as the press wants to paint them. But of course that would require objective reporting, and would lessen the possibility of electing a Democrat in November.

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