There was an interesting, if obvious, editorial in Investor's Business Daily on the 10th. The editors pointed out that while the US economy has recovered from the slump of 2000-2001 and continues to grow (+4.7 million jobs since 2003 for instance) consumer confidence continues to lag. Their conclusion is that this is largely the result of the mainstream media "no good news" approach to reporting.
Missing The BoomPosted 3/10/2006
Economy: With rising incomes, soaring wealth, bigger and better homes, plenty of jobs and low inflation, we may be living in the most prosperous time ever. Yet chances are you don't believe it one bit.
The economy isn't perfect, of course. But it's a long way from bad — a long, long way. We ponder this as a new employment report comes out, showing 243,000 new payroll jobs in February even as the number of people re-entering the labor market swelled by nearly 350,000.
So before the data are spun beyond recognition by others, let's recount the good news: Since May 2003, when President Bush's tax cuts became law, the U.S. has created 4.7 million jobs. Payrolls have now expanded for 30 straight months. The jobless rate, though up a tick at 4.8%, is still near its five-year low.
Worker pay is also on the increase. Average weekly earnings rose 3.5% last month from a year earlier — the best gain in more than four years.
Last summer, we all were fretting about the economic impacts of higher interest rates, surging energy prices and Hurricane Katrina. But over the last year, including the hurricane season, monthly job gains have averaged 197,000 — more than enough to sop up the 130,000 to 150,000 monthly growth in the U.S. labor force.
Based on the continued job growth and powerful gains in retail spending, most analysts now expect GDP to jump at least 4.5% in the first quarter and 3% for all of 2006 — even as the Federal Reserve continues to tighten credit.
In spite of all the great news, Americans remain strangely downbeat. A Gallup Poll taken earlier this year found just 38% who viewed the economy as "excellent" or "good" — down from 46% at the start of the last recession.
Our own IBD/TIPP Polls have shown sharp drops in economic optimism and consumers' six-month outlook. (Results of our March survey are due Tuesday.)
No doubt about it, the economy keeps powering along. Yet many Americans seem to think it's all a mirage and are sold on the idea that these are the worst of times.
Why the gloom? Much of it, no doubt, stems from misreporting by the media. Against the backdrop of surging payrolls, for example, we keep seeing story after story, in print and on TV, about job "losses."
A recent study by the Media Research Center bears this out. It looked at TV news coverage of jobs in 2005 — 151 stories in all — carried on all three major networks.
This, mind you, was a year that saw the creation of 2 million new jobs, the addition of $350 billion to gross domestic product and an increase of $2 trillion in the value of household financial assets.Yet more than half of the networks' job reports focused on losses, not gains — a picture that wasn't just distorted, but wrong.
Americans deserve better. In fact, they may already know better. The same polls, including ours, in which Americans indicate they are down on the economy in general also show they are upbeat about their own financial situation.
This, more than anything else, may indicate that Americans are being influenced too much by mainstream media outlets that would rather be wrong than acknowledge that an economic boom is under way.
http://www.investors.com/editorial/IBDArticles.asp?artsec=20&issue=20060310
