December 7, 2005
Media Downplay Strong November Jobs ReportBy Noel Sheppard
A recent report published by the Gallup Organization stated that
Regardless of continuously strong economic reports, such bearish assessments have been regularly portrayed by public opinion polls for several years. During this period, economists and politicians — including the Bush administration — have wondered what is responsible for this disconnect between perception and reality.
A detailed look at how unemployment numbers are shared with the public by mainstream media outlets gives us some clues. The Labor Department on Friday announced very strong employment gains for the month of November. In fact, this was the largest number of job creations since April. However, this news was reported to the public in a fashion that largely downplayed its significance. A 3.2 percent annual increase in wages was characterized as employees 'basically treading water.' Although energy prices have been steadily declining since September, jobs market stories included references of this still being a 'huge concern.' Other news accounts referred to the unemployment rate being 'stuck at 5 percent,' as if a 5 percent unemployment rate is a bad thing, while one cable news outlet told viewers to take the numbers 'with a grain of salt.'
The reporting began early Friday morning moments after the Labor Department's press release as CNN's Chris Huffington shared the news on 'Live Today':
Huffington quickly began to downplay the report:
He then stated that this report shouldn't be taken too seriously:
Huffington concluded his report by misrepresenting the manufacturing side of the data:
Quite the contrary, there were 11,000 new manufacturing jobs created in November on top of the 15,000 in October.
Shortly after the Labor Department released the November jobs report, President Bush made a brief speech about the economy outside the White House. ABC News Now's 'Couch Potatoes' program followed with Martha Raddatz stating:
She then downplayed the jobs report with:
By this time, America's newswires started getting into the act. The Associated Press' Jeannine Aversa stated early in her report,
Aversa then shared the hourly wage increase, and how this was up 3.2 percent since last November. However,
America's three broadcast networks' evening news programs also downplayed Friday's jobs announcement. Betsy Stark of ABC's 'World News Tonight' stated:
This was an odd item to single out given that this sector lost a grand total of 5,900 jobs in November, or a scant 0.4 percent. Also, her statement completely ignored the fabulous retail sales numbers reported Thanksgiving weekend, and that gas prices declined by more than 30 cents a gallon in November, bringing the average price around the country down to levels not seen since before summer began.
Anne Thompson on NBC's 'Nightly News' tempered her jobs report Friday evening by bringing up car company plant closings, along with concerns expressed by Federal Reserve chairman Alan Greenspan about the budget deficit:
'But for all the good news, there are some red flags. The Wall Street Journal is reporting Ford will close five plants and lay off 7,500 workers as part of a turnaround plan. And Federal Reserve chairman Alan Greenspan is warning of severe consequences for the economy if the budget deficit isn't controlled.'
Thompson began to wrap up her report with the following cheery thought:
Yet, the gloomiest of the three network news reports was done by the CBS 'Evening News.' Business correspondent Anthony Mason quickly downplayed the jobs numbers:
'But while businesses are literally begging for workers in New Orleans, the unemployment rate for Katrina evacuees who haven't returned home is still almost 28%. Other parts of the country are also suffering. Layoffs in the auto industry are hurting the Midwest. And Ford reportedly is considering closing five more North American plants.'
Like CNN's Chris Huffington, Mason misrepresented the manufacturing data with a quote from Carl Camden of Kelly Services:
The report concluded with Bob Schieffer first asking Mason,
America's print media played its part in spreading the gloom as well. The New York Times presented a negative side to what should have been a positive story in the second paragraph of its Saturday article:
'But on the fourth anniversary of the recovery from the 2001 recession, job growth is still below the levels achieved in previous recoveries, and the unemployment rate has been stuck at 5 percent nearly every month since June.'
This statement raised a couple of interesting issues. First, the mainstream media for more than two years have been downplaying the importance of the unemployment rate because it is determined by the Census Bureau's 'Household Survey.' The press have continually maintained that the Bureau of Labor Statistics' 'Establishment Survey,' which produces the data concerning non—farm payrolls, is a much broader and more reliable measure of employment.
In fact, just last month, the Times stated of the October employment report: 'The jobless rate fell slightly, to 5 percent from 5.1 percent. It is calculated from a survey of households, which economists consider less reliable than the much larger survey of businesses that produces the job—growth numbers.' According to the Times, the drop in the unemployment rate last month was irrelevant because the Household Survey is 'less reliable.' Yet, this month, the significance of a huge increase in non—farm payrolls is diminished because the unemployment rate, as determined by the Household Survey, didn't decline.
In reality, the New York Times hasn't always felt that the Household Survey was 'less reliable' than the Establishment Survey. On May 3, 1997 when the unemployment rate dropped below 5 percent for the first time in decades, the Times ran a front—page story entitled 'U.S. Jobless Rate Hits 23—Year Low.' This article spent the bulk of its allotted space discussing this 'fabulous' news from the Household Survey. Yet, buried deep in this article were disappointing results from the Establishment Survey:
Curiously, this 1997 front—page article failed to inform the reader that average hourly wages that April declined by a penny. By contrast, this Saturday's article on the November jobs picture addressed the 3.2 percent annual increase in hourly wages as being 'less than the inflation rate of 4.3 percent, as measured by the Consumer Price Index through October.'
The Washington Post on Saturday took a different approach. When the nation produced more new jobs than it has in seven months, not only didn't the Post have one of its own writers report it, but the AP article on the subject was placed on page D2. By contrast, on November 5, when the Labor Department announced non—farm payroll gains below what Wall Street expected, the Washington Post's own Nell Henderson's article entitled 'Nation Gained Few Jobs In October' was prominently displayed on the front page of the business section.
Is it any wonder that the public is so gloomy about the economy?
Noel Sheppard is an economist, business owner, and contributing writer to the Free Market Project. He is also contributing editor for the Media Research Center's NewsBusters.org. Noel welcomes feedback at email@example.com.