January 5, 2006

The Jobless Claims Report: AP’s Martin Crutsinger Discounts the Present, and Gets the Past Wrong

Filed under: Economy,MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 5:05 pm

The Associated Press’s Martin Crutsinger has been on the opposite of a roll:

  • Just before Christmas, he appeared to be lowballing the consensus estimate of 4th Quarter 2005 GDP growth by describing it as “around 3 percent,” when a broad-based Bloomberg survey of economists indicated a consensus forecast of 3.3%.
  • Second, he pooh-poohed November’s Construction Spending report released two days ago by giving full credit for the increase to a record level to Government Sector spending, which offset decline in “home building.” The reality was that Nonresidential spending in the Private Sector deserved the largest portion of the credit, and that the residential spending decline, which occurred in the Government Sector, was most likely related to apartments, assisted-living quarters and other non-owned properties.
  • Today, he sought to discount the good news about initial job claims, and hearkened back to the previous economic expansion with an incorrect reference.

Here are the first, second, and fourth paragraphs from Crutsinger’s January 5 article (HT Weapons of Mass Discussion, with “yeah, but” wording in bold):

Jobless Claims Plunge to Five-Year Low

The number of newly laid-off workers filing claims for unemployment benefits fell to the lowest level in more than five years last week, but economists cautioned that the decline is probably overstating the improvements in the labor market.

The Labor Department reported Thursday that applications for unemployment benefits dropped by 35,000 to 291,000, the smallest number since Sept. 23, 2000, when the economy was in the concluding months of the longest economic expansion in history.

….. However, economists noted that last week’s improvement is probably exaggerating the labor market rebound because it is hard to get a clear reading of layoffs in the week between Christmas and New Year’s.

Crutsinger makes to references to pooh-poohing “economists,” but only quotes one who seemed to support his first cold-water splash (Stephen Stanley, chief economist at RBS Greenwich Capital). The second economist quoted (Ian Shephardson, chief economist at High Frequency Economics) made a technical comment about expected upcoming improvements that did not discount the validity or significance of today’s report.

What about the italicized words in the excerpt? Oh, that’s Crutsinger’s “those were the days” bit about the last time unemployment claims were so low. He uses a clever reference to the economic expansion of the 1990s to get in a plug for the previous administration.

Cute. Too bad it’s wrong.

September 23, 2000, was towards the end of that year’s third quarter. Third quarter 2000 GDP growth, per the government’s Bureau of Economic Analysis, which publishes and maintains the GDP reports, was minus 0.5%. To see this figure, go to this link at the BEA, select a start date of “2000-A&Q” or earlier, and hit the “Refresh Table” button.

The expansion concluded in the 2nd quarter of 2000, not the 3rd. Sorry, Martin.

Cross-posted at NewsBusters.org.

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1 Comment

  1. also cross posted at newsbusters.org

    Of course, it will be interesting to note how little coverage this massive drop in unemploymnent is likely to receive.

    My beef here also would address his statement: “…since Sept. 23, 2000, when the economy was in the concluding months of the longest economic expansion in history.

    No – I’d say that it concluded by June, 2000 +/-. The media wants us to believe that it coincided with the Bush presidency – nooooooo way. I would also argue that it was contraction across all fronts, not just GDP (including meida favorites — job creation, pay raises, business expansion,. etc. starting in April, 2000 or shortly thereafter.) GDP numbers I concur showed contraction in the 3rd and 4th q’s, Not – concluding in Sept. 23, 2000.” GDP did shrink considerably immediatly following the second quarter – accelerating into the 4th quarter.

    I’d have to go no futher than the progressive economist Dean Baker (05/09/03 – In These Times | Bursting Bubbles ) – you have read, right? He is a darling of the media, when he talks the way they like – but they skipped this one and a few more of his papers. Every liberal journalist should be forced to read it over and over again) to find fruitfull evidence that the economic expanision ended in unison with the March, 2000 bubble stock market crash – or at least to make the point that the crash caused the economic reversal:

    A convenient story explains this sharp economic reversal. According to the script, Clinton eliminated the deficit through progressive tax increases and spending restraint. This deficit reduction lowered interest rates and spurred an investment boom, which was the basis for the extraordinary growth of the late ’90s. Then Bush came into office and quickly squandered the surplus with his tax cuts to the rich and military build-up. As a result, the deficit skyrocketed and the economy tanked.

    It’s a good story, but the reality is quite different. The Clinton boom was built on three unsustainable bubbles. One of them, the stock bubble, has already burst. The other two bubbles—the dollar bubble and the housing bubble—are still with us. The dollar bubble is starting to deflate, and the housing bubble is perhaps just now reaching its peak. These bubbles created the basis for the 2001 recession and the economy’s continuing period of stagnation…..

    The economy’s reversal was associated with a plunge in the stock market.

    Did the AP ever mention that factual view of economic history?

    Another good solid sorid fact missed by the mainstream press, and hence by the public at large was provided by the radical leftist clumnist, Robert Scheer acknowledgement of….. Published June 6, 2000 in the Los Angeles Times

    “What great news last week–116,000 people, mostly black, Latino and poor, lost their jobs….”

    I always wished that more people had noticed that in June of 2000, 116,000 workers, mostly minorities (according to the radical leftie Scheer) lost their jobs – right in the midst of the era of prosperity and equality for all. Also on occassion, even Krugman has slipped in a similar understanding of the facts (hidden deep in the quagmire of his dark writings).

    Comment by gary — January 5, 2006 @ 6:19 pm

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