In a generally even-handed report on yesterday’s drop in consumer confidence as reported by the Conference Board (from a revised 68.7 to 64.9, vs. expectations of a rise to 69.6, according to Bloomberg), the Associated Press’s Mae Anderson, with assistance from Christopher Rugaber, engaged in a bit of excuse-making in and downplaying in their later paragraphs.
The AP pegged its water-down to a strong upward move in the yesterday’s stock trading, pretending that investors didn’t take the confidence report seriously. That’s odd, because other press reports attributed those gains to “rising optimism about Greece’s prospects to remain in the euro zone, which offset a disappointing reading on U.S. consumer confidence.” In other words, the report was considered, but the news out of Greece was better. The relevant later paragraphs from AP’s report, one relatively early, and the rest appearing much later, are after the jump (bold is mine):
… the data, which was based on a survey conducted from May 1 through May 16 with about 500 randomly selected people nationwide, suggests that “the pace of economic growth in the months ahead may moderate,” (the Conference Board’s Lynn) Franco said.
… on Tuesday, Wall Street seemed to shrug off the report. The Dow Jones industrial average was up about 68 points by mid-afternoon.
That indicates investors may be more confident in the economic recovery than consumers, said John Lonski, chief economist of Moody’s.
“Financial markets are giving short shrift to the drop in consumer confidence,” Lonski said.
Investors may have been paying closer attention to the much sunnier Thomson Reuters/University of Michigan index of consumer sentiment that came out Friday. That index, which is also considered a measure of consumer confidence, jumped to 79.3 in May for its best reading since October 2007 – two months before the recession began.
The biggest reason for the difference, economists said, was probably timing: The Conference Board finished its survey May 16, while the University of Michigan survey continues throughout the month. That means the Conference Board didn’t capture all the recent declines in gas prices, and it finished just as worries about Europe’s financial crisis hit a crescendo, ahead of an international summit.
The markets could also have played a role. The Dow fell sharply in the first half of the month, then leveled off after May 16.
The Thomson Reuters/University of Michigan index “climbed climbed to 79.3 from 76.4 the prior month.” (TR/UofM uses a reading of 100 as an indicator of a “healthy economy”; the Conference Board’s analogous point is 90.)
As to the points AP attempted to make:
- The extra week at most which TR/UofM covered saw gas prices drop about three cents. That’s supposed to matter?
- As to whether investors like TR/UofM better or are ignoring it, zheesh — Which is it?
- The biggest point to make is that from all appearances TR/UofM covered a full month (the work is done “throughout the month,” per its latest press release), meaning that it contained at least a week and perhaps as much as 10 days of April when optimism was higher.
All of this said, at least the misdirections didn’t come until later paragraphs, which most subscribing outlets won’t pick up anyway.
Cross-posted at NewsBusters.org.