Thursday, July 30, 2009

Another Great Example of How Economics 'Reporting' Works

Yesterday the big economics news was that home prices were up in May. Today the big news is that first-time unemployment claims are up above what was expected.

Yesterday, the good news was universally hailed as a sign of more good news to come: a 'trough' has been reached, the drop in home prices has bottomed out, etc.

Today, the bad news on jobs is just an 'aberration': "Proper accounting of seasonal factors would explain away this unexpected increase in unemployment." (Note that everyone expected some kind of increase in jobless numbers, just not by this much.) NPR, for example, emphasizes that "the trend is down" in numbers of first-time unemployment claims (again, not down in overall numbers of unemployed).

Some have pointed out that there are seasonal variations in home prices. Easier to look in warm weather, properties look more appealing, problems like heating, are less apparent, more people are moving (students, families with kids out of school for the summer). Curiously, this was not immediately or prominently offered as a caveat with regard to the 'good news' about home prices.

Contrary to what some assert, the media does indeed get to pick and choose its facts. The excuse is "editorial necessity" or "experts tell us". The same editorial necessities and expert advice that guided reporting on Iraq, the entire Middle East, and of course, the economy.

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