January 9, 2016

AP Applauds ‘Blistering Pace’ Jobs Report, Buries Awful Wholesale Trade News

Yesterday at NewsBusters, Ken Shepherd noted how quickly and gleefully the New York Times jumped (“an impressive sprint capping off a year of solid job growth”) on December’s relatively strong jobs report.

The Associated Press joined the parade — “US EMPLOYERS HIRE AT BLISTERING PACE, DEFYING GLOBAL TRENDS” – and kept its story as its lead in its Business “Top Stories” until late afternoon. While that treatment was defensible, the absence of the wire service’s terse coverage of the government’s disturbing wholesale sales and inventories report from the “Top 10″ roster wasn’t. Clearly, the good news stays, while the bad news gets memory-holed at the Administration’s Press.

Predictably, Martin Crutsinger’s four-paragraph blurb on the wholesale trade situation told readers as little as possible, and included a heavy dose of deception (produced in full for future reference, and for fair use and discussion purposes):


Crutsinger failed to tell readers that he disclosed the seasonally adjusted percentage changes. The raw changes in inventories and sales were -0.8 percent and -7.8 percent, respectively. Unless and until you properly describe your figures, Marty, you’re not telling the truth.

The AP reporter’s reference to “businesses” having “empty shelves” is a joke. While they have come down a bit in recent months, seasonally adjusted inventories (wholesale; manufacturing) are still bloated. They’re not coming down as fast as sales are cratering, meaning that inventory-to-sales ratios have become even more dangerously high. The longer they stay there, the more likely it is that wholesalers, manufacturers and ultimately retailers will have to keep slashing prices to keep the merchandise moving, and the more likely it is that some inventories will become obsolete.

Crutsinger’s biggest failure is that he failed to tell readers that seasonally adjusted year-over-year sales at the wholesale level have declined for the past 11 months, and came in at levels below what was seen two years ago in both October and November:


As Zero Hedge pointed out yesterday, the high inventory-to-sales ratios have historically been recessionary red flags (past recessions are in red):

Crutsinger’s citation of the JP Morgan Chase prediction of 2 percent annualized growth for this year’s fourth quarter (note the absence of an “annualized” descriptor) was selective. Yesterday, the Atlanta Branch of the Federal Reserve, which was at 1.0 percent at the time of Crutsinger’s writeup, lowered their foruth-quarter growth estimate to an annualized 0.8 percent. With declines such as those seen above in wholesale sales taking place routinely, it is not unreasonable to wonder how any economic growth can be occurring at all.

All of the above doesn’t automatically mean that the economy is in recession or necessarily heading quickly in that direction. But readers can be assured that if we were seeing awful news like this at the wholesale level during a Republican or conservative presidential administration, the AP wouldn’t have memory-holed it almost instantly, and would have pointed to previous history as evidence that the economy, despite yesterday’s jobs report is not “sprinting” or moving at a “blistering pace.”

Cross-posted at NewsBusters.org.


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