What is this week's Official Story on the economy? The Google news query "inflation + economy" brought it up immediately. As is often the case, what we are supposed to believe came from the Associated Press courtesy of the Washington Post.
Summary Box: Job gains should offset inflation and lead to better growth later this year
By Associated Press, Published: May 12
WASHINGTON — JOBS OUTWEIGH INFLATION: Rapid hiring by private companies should offset higher gas and food prices, setting up the economy for better growth in the second half of this year.
PRICE PRESSURES EASE: Economists say the drag from higher inflation is temporary. Oil and other commodities have fallen in price in recent days, and gas is likely to follow. That should give consumers more money to spend and companies more confidence to hire.
STEADY HIRING AHEAD: Employers are expected to keep adding jobs at a pace of roughly 200,000 a month. That should slowly reduce unemployment.
And then there was the copyright on this week's propaganda, indicating that the AP owns all rights to it
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Well, I just did publish it. Sue me. The "short version" above summarized the long version Job gains should offset higher gas and food prices. Let's look at STEADY HIRING AHEAD.
WASHINGTON (AP) — The best hiring market in five years should limit the damage from inflation and position the economy to thrive in the second half of the year...
"We are going to see the economy picking up steam," said Joel Naroff of Naroff Economic Advisors, who is among many economists who think gas prices will taper off. "Lower energy prices will give consumers more confidence to spend, and higher consumer spending will give businesses more confidence to hire and invest."
We should see those lower energy and food prices any day, week month now. Lower prices will make "consumers" more confident, which will cause them to spend more money, which in turn will give businesses more confidence to hire and invest. Give Joel Naroff a Gold Star! He's on the winning team! The propaganda message you are supposed to believe is explained in the text below, which I will partially deconstruct for your convenience and edification. The AP starts off with a succinct statement of the current problem.
Economists have expressed concerns that those higher [energy & food] prices could leave consumers with less money to spend on discretionary goods and services, like cars and clothing, furniture and vacations. Those are the kinds of spending that help power the economy and embolden employers to hire.
But not to worry. Hiring is going gangbusters!
But businesses felt confident enough in April to add 268,000 net jobs. It was the biggest monthly hiring gain in five years. Over the past three months, companies have added an average of 250,000 jobs a month — the best hiring stretch since a year before the recession began.
Is there a monkey wrench in the works?
And the number of people seeking unemployment benefits dropped last week after a temporary spike in April, the Labor Department said Thursday.
This is the key passage. In fact, unemployment claims have been disturbingly high for several weeks now.
In the week ending May 7, the advance figure for seasonally adjusted initial claims was 434,000, a decrease of 44,000 from the previous week's revised figure of 478,000. The 4-week moving average was 436,750, an increase of 4,500 from the previous week's revised average of 432,250.
From Calculated Risk, initial unemployment claims through April, 2011. Note the spike at the very end of the series.
Higher recent unemployment claims must be downplayed by the AP in order to make the propaganda story stick. And that's what they did in saying claims dropped last week after a temporary spike in April, despite an increase in the 4-week moving average. With that little glitch out of the way, the show can go on. Frankly, I not sure why the AP even mentioned high initial unemployment claims. What is this, some half-assed attempt at honest reporting?
The optimism is catching on with ordinary Americans. An Associated Press-GfK poll shows that more than two out of five people think the economy will improve. A third think it will stay the same. Nearly a fourth think it will worsen. The results mark a rebound from a more pessimistic attitude last month.
The optimism? What optimism? Well, businesses felt more confident, hiring 256,000 workers last month. And more than 40% of Americans think the economy will improve. Not is improving. Will improve. Nonetheless, now that the AP has firmly established the optimism, they can make rosy predictions about the future.
Businesses will keep adding roughly 200,000 jobs a month for the rest of the year, economists predict. That should slowly reduce the 9 percent unemployment rate and put more money in consumers' pockets, on top of a cut in workers' Social Security tax that took effect in January.
And there it is, this week's propaganda story from the Associated Press. If your thinking about current economic conditions departs from The Official Story in any way, your thinking is perverse, incorrect and un-American. You should be chastised, if not fined, jailed, or otherwise punished, for your deviant social views, and I for one have no sympathy for you. It's as easy as 1-2-3.
1. JOBS OUTWEIGH INFLATION
2. PRICE PRESSURES EASE
3. STEADY HIRING AHEAD
Don't you feel better now?
Bonus Video
The following two words should tell you all you need to know about how seriously you should take such reporting:
"economists predict"
Posted by: Tony Weddle | 05/15/2011 at 05:54 PM