August 3, 2007

Top Two Biased Reports of the Week – Economy and Business Division

Runner Up

One of the Associated Press’s earliest articles following Friday morning’s release of the government’s Employment Report, which showed July’s unemployment ticking up 0.1% to 4.6% and new jobs increasing by 92,000, had this outrageous paragraph (backup link is here in case the article is revised or removed; bolds are mine):

Construction companies slashed 12,000 jobs in July. Manufacturers shed 2,000 and retailers cut a thousand. Some 28,000 government jobs were eliminated. In contrast, education and health care added 39,000. Leisure and hospitality expanded employment by 22,000. Professional and business services added 26,000 new positions.

Note that AP uses violent terminology to describe relatively modest decreases in employment caused by (apparently evil) private-sector employers, while it applies relatively bland verbs to much larger private-sector increases. Meanwhile, the description of the large reduction in government jobs slips into passive voice, with no perpetrator identified. Zheesh — How obviously biased can you get?

And exactly how does AP know that the government jobs “were eliminated,” anyway? Couldn’t at least some of the government job reductions relate to departing employees whose replacements haven’t been hired yet?

It seems pretty hard to beat the above paragraph for bias, but as you’ll see, the AP was up to the task earlier this week.

The Winner

This is from Thursday’s Tacoma News Tribune, reacting to the Wednesday’s release of the Institute for Supply Management’s Manufacturing Index:

Institute’s monthly survey of plant managers shows economy limping along

While the U.S. manufacturing sector grew for the sixth consecutive month in July, expansion was the slowest since March, a survey said Wednesday, indicating that the economy is plodding along at a tepid pace.

The Institute for Supply Management said its manufacturing index, which reflects the opinions of purchasing managers at factories, plants and utilities, registered 53.8 in July, down from 56.0 in June.

Though not indicated at the link, the Tribune’s report copies the first two paragraphs of this Wednesday report from the Associated Press. But the Tribune is apparently responsible for the headline.

Manufacturing is only 13% 12% of “the economy,” meaning that the “limping” and “tepid” characterizations for the entire economy, especially following last week’s report that the economy grew at an annualized rate of 3.4% in the 2nd quarter, could not (and still cannot) be supported. Also, any index reading above 50 represents expansion, so 53.8 has to be seen as a bit better than a “limp.”

July’s weighted average of the manufacturing and non-manufacturing indices came in at 55.2, which, though lower than most readings during the past year, is still very decent.

I would think that most reasonable people would dispute the AP’s “limping, tepid” characterizations of the economy upon seeing the following graph. It shows the weighted averages of the ISM indices going back to July 1997, when it issued its first Non-Manufacturing report (see the Note below):

ISMweighted1997to2007

Tepid, schmepid.

(Note [revised from earlier, with little impact on the graph presented]: The relative weights given to manufacturing and non-manufacturing are based on annual data available at this Commerce Department page [second link at referenced page]. The weights used for the first seven months of 2007 are the same as 2006. In 1997, manufacturing was 15.4% of the economy; in 2006, it was 12.1%. Rather obviously, non-manufacturing is the rest of the economy. The dividing line between the Clinton and Bush 43 economies is October 2001, the beginning of the first fiscal year over which Bush 43 policies had impact on the federal budget and the economy.)

Cross-posted at NewsBusters.org.

July’s Employment Report (Updated for ISM Non-Manufacturing Report)

Predictions and Precursors:

  • ADP’s Employment Report came in Wednesday at 48,000 new nonfarm private payroll jobs.
  • The consensus (here) is that about 135,000 new jobs were created in July, and that the current unemployment rate of 4.5% would stay the same.

The Report (BLS release is here):

  • Unemployment — 4.6%, unchanged up 0.1% (predix: some in the press will jump on this as the imminent arrival of Armageddon)
  • New Establishment Survey Jobs — +92,000
  • Revisions to previous months — May, -2,000 (from 190,000 to 188,000); June, -6,000 (from 132,000 to 126,000).
  • Net change in new jobs, including revisions to prior months — +84,000 (92 – 2 – 6)
  • Change in number of people working per the Household Survey — minus 30,000.

Quick Thoughts:

July was not a good month at all for employment growth, but I would guess that the stock market won’t consider the report to be terribly relevant compared to other influencing events.

This is when housing construction and home-improvement activity should be at its peak, but both industries are in a slump. Given the difficulties there, it’s gratifying that total construction employment was down by only 12,000 jobs.

On the positive side, employment in most non-governmental service sectors grew nicely (education and health care, + 39; professional and business, +39; leisure and hospitality, +22). This would appear to bode well for the ISM Non-Manufacturing Index to be released at 10 AM today (not so – See Update below).

Here are a couple of interesting numbers — Black/African-American and teenaged unemployment fell pretty sharply — from 8.5% to 8.0% and 15.8% to 15.2%, respectively. Both percentages are still higher than anyone would like to see them. But, as noted here previously, those figures have, up to now, stayed stubbornly high relative to previous economic expansions. Could late June’s shamnesty-bill failure in the Senate have influenced this by making employers less likely to hire illegals, forcing them to find relatively unskilled citizens to do the work instead?

Media Commentary:

The clearly pre-drafted text starting at the middle of Paragraph 6 in this Associated Press report (time-stamped 8:58 a.m.; go here for actual text if the AP report gets updated or moved) shows that AP was ready with the “poor Bush economy poll numbers; fears of out-of-control inflation; sour housing market; stocks cratered last week” mantras even before the numbers came out. Also note the contrast in the words used to describe modest employment decreases and pretty strong increases in this paragraph:

Construction companies slashed 12,000 jobs in July. Manufacturers shed 2,000 and retailers cut a thousand. Some 28,000 government jobs were eliminated. In contrast, education and health care added 39,000. Leisure and hospitality expanded employment by 22,000. Professional and business services added 26,000 new positions.

So AP describes modest decreases in employment caused by evil private-sector employers using violent terminology, while much larger private-sector increases get relatively bland verbiage. Meanwhile, the description of the larger government job reductions slips into passive voice with no perpetrator identified. How obviously biased is that? And exactly how does AP know that the government jobs “were eliminated,” anyway? Couldn’t at least some of the government job reductions relate to departing employees whose replacements haven’t been hired yet?

__________________________________

UPDATE, 10:15 a.m.: So much for the theory above — The ISM Non-Manufacturing Report came in at 55.8%, which, though still solidly in expansion mode (any reading above 50% represents expansion), is almost 5 points below June’s 60.7%, and way below expectations of 59.0%. The consecutive-month streak for non-manufacturing expansion is now 52.

Nevertheless, proportionally mixing in July’s manufacturing figure of 53.8% with non-manufacturing’s 55.8%, the overall economy is at 55.5% (about 13% of the economy is manufacturing). That’s not as strong as desired, but surely is not, as ridiculously described here, “limping along” or “tepid.”

Positivity: Crash Survivor Still Has the Same Drive

Filed under: Positivity — Tom @ 6:00 am

From Irwindale, California:

Article Launched: 07/26/2007 09:32:28 PM PDT

Gary Jenkins admitted others might think he’s crazy.

But he expects to be in his driver’s seat at Irwindale Speedway on Saturday, ready to race in the ACDelco Super Late Model series main event. He’s going to do it nearly two weeks after he almost died on the track’s half-mile oval.

The San Diego resident was up to eighth when the car driven by Newport Beach’s Brian Wong went through “my window like a torpedo.”

The car’s tire nearly hit his head, the fender went through the safety net brace and the front of Wong’s car severed the welds that hold the head restraint in place. He was wearing a HANS neck safety device, but if the front of Wong’s car had gone 3 inches farther, it would not have mattered. Jenkins, who turns 59 on Tuesday, would have suffered severe head trauma, a fractured spine and more than likely would have bled to death before Irwindale’s safety crew reached him.

“It is a miracle, really,” he said. “I have a sticker on my rocker arm that says, `Jesus saves.’ Well, He did save my life. No one expects me to be there (Saturday). If I can function, I will be there.”

Go here for the rest of the story.