October 27, 2013

AP Predictably Gives Weak Sept. Durable Goods Report a Positive Headline and First-Paragraph Shutdown Blame

At the Associated Press Friday morning, economics writer Christopher Rugaber’s story had a predictably sunny and incomplete headline (“LONG-LASTING US FACTORY GOODS ORDERS RISE 3.7 PCT.”) followed by an opening paragraph which told readers that “orders for most other goods fell” and which speculated without basis that the substantively bad news was “a possible sign of concern about the partial government shutdown that began Oct. 1.”

That’s a great reporting strategy if your goal is to keep busy news consumers inadequately informed. Those who only read the headline will believe that this economic element was unequivocally positive. Those who only get through the first paragraph will see the bad news and blame congressional Republicans, on whom the establishment media has successfully pinned the blame for the 17 percent shutdown — even though it objectively doesn’t belong there. Excerpts follow the jump (bolds are mine):


A jump in demand for commercial airplanes boosted orders for long-lasting U.S. factory goods last month. But orders for most other goods fell as businesses cut spending, a possible sign of concern about the partial government shutdown that began Oct. 1.

The Commerce Department said Friday orders for durable goods rose 3.7 percent in September, above the 0.2 percent gain in August. But a 57.5 percent jump in aircraft orders accounted for nearly all the gain. Durable goods are meant to last at least three years.

Orders for core capital goods, which include industrial machinery and electrical equipment, fell 1.1 percent. August’s 1.5 percent gain was revised sharply lower to 0.4 percent. Economists pay particular attention to core capital goods, which exclude aircraft and defense-related goods, because they are a sign of business confidence.

What the durable goods report really showed is such orders began falling long before the prospect of a partial government shutdown, something which most businesses have been conditioned to tune out until they actually happen, even existed.


The figures echo other economic data that suggest companies were reluctant to expand or invest in new equipment in September, as budget battles in Washington intensified. Hiring also slowed last month. Employers added just 148,000 jobs, down from 193,000 in August.

See how Rugaber attempted to correlate a slowdown in hiring with the partial shutdown, even though he should know that each month’s Employment Situation Summary from the government’s Bureau of Labor Statistics is based on the “calendar week (Sunday through Saturday) which includes the 12th day of the month.” In September’s case, that period included the 8th through the 14th. So the final day of the relevant period was over two weeks before the partial shutdown began. Sorry, Chris; the September jobs report was lousy because the pre-partial shutdown economy was already lousy.

It’s also worth noting how eager the press is to cite the federal government’s budget battles as contributing to business uncertainty. That starkly contrasts with its how it downplays or ignores the more obvious, more specifically influential, and more frequently cited (by affected businesses) impact of uncertainties relating to pending and existing government regulations, especially the growth in their arbitrary enforcement during the Obama administration.

As to the responsibility for the shutdown, allow me to quote the final two paragraphs of one of my recent columns:

The White House has already acknowledged that “more recent indicators suggest the labor market worsened in the month of October.” It will of course play pin-the-blame on Republicans for all of this, even though it’s Reid’s Senate and Obama himself who consciously chose not to deal with bills passed by the House which would have kept the government running, and even though Obama owns the HealthCare.gov disaster.

They can whine all they want about John Boehner’s alleged obstruction and point all day and all night at cooked polls which supposedly say Republicans and especially tea party conservatives are to blame, but the continued economic malaise, like the HealthCare.gov debacle, is completely and objectively on them.

Cross-posted at NewsBusters.org.


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