July 3, 2013

AP Continually Trumpets ‘Best in 5 Years’ Economic News, But Ignored Two Grim Milestones in Today’s Service Sector Report

I suspect that a number of people are tired of the establishment press telling us how so many economic reports have “best in” or best since (specific month in) 2008 (or 2007)” figures, especially the ones that still don’t reflect what anyone would consider acceptable in normal economic times. Just a few examples include housing starts, housing permits, new home sales, existing home sales, initial unemployment claim, and the unemployment rate.

That doesn’t bother me too much, though the press missed quite a few “best since” figures during the Bush 43 presidency. What’s intensely annoying is when “worst since” figures, which the press studiously identified during the Bush era, hit them in the face in today’s economy and are downplayed or ignored. A pretty good example was today’s Non Manufacturing Index from the Institute for Supply Management, which, at 52.2%, hit its lowest point since February 2010, and had two key components which were the worst in almost four years. Christopher “Gone Are the Fears That the Economy Could Fall Into Another Recession” Rugaber at the Associated Press, aka the Administration’s Press, reported the primary decline but ignored the components while trumpeting an uptick in the employment line item (bolds are mine throughout this post):

SURVEY: US SERVICES FIRMS GROW SLOWER, HIRE MORE

U.S. services firms grew at a slower pace in June from May but added more jobs. The figures offered a mixed sign for companies that employ roughly 90 percent of the workforce.

The Institute for Supply Management said Wednesday that its index of service-sector growth fell in June to 52.2. That’s down from 53.7 in May and the lowest reading in more than three years. Any reading above 50 indicates expansion.

The index was dragged down by steep drops in new orders and a measure of the business outlook.

Still, a gauge of employment jumped to 54.7, up from 50.1 in May. That’s the first increase in five months and suggests services firms hired more briskly last month.

The survey measures growth at businesses that cover most of the job market. They range from construction companies and health care firms to retail businesses and restaurants.

The ISM report comes a day before the government issues its June employment report. That is expected to show employers added 165,000 jobs last month, while the unemployment rate stayed at 7.6 percent.

The index was last lower than 52.2 in February 2010:

NonMfgIndexJune2009toJune2013

Writing “since February 2010″ takes up less space and is more accurate and specific than “in more than three years.” “in almost 3-1/2 years” would have been even better.

Zero Hedge identified the other two “worst” in figures after the ISM’s report came out, and added a snarky comment about the jobs number as a bonus (paragraph breaks added by me):

The New Order components was absolutely destroyed printing at 50.8, down from 56.0, and the lowest since July 2009.

Furthermore, Business Activity tumbled from 56.5 to 51.7, far below consensus of 56.8, and the lowest since November 2009.

The only good indicator on the face of this absolute devastation was the Employment index which mysteriously rose by 4.6 to 54.7, the highest since February: those part-time jobs must sure be accretive to businesses.

Additionally, as seen here, the combined weighted index of the ISM’s Manufactring and Non Manufacturing indices is at its lowest point since January 2010.

The two indicators which fell to respective 47- and 43-month lows are arguably the best indicators of future GDP future growth.

As I noted earlier today at my home blog: “… it looks like Recovery Summer, at least in any meaningful sense from the vantage point of purchasing managers, has been cancelled for the fourth year in a row.”

Cross-posted at NewsBusters.org.

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