THANKS FOR MAKING THINGS CLEAR
AMY BALDWIN, AP Business Writer
NEW YORK - An upbeat economic assessment by Federal Reserve Chairman Alan Greenspan prompted investors to bid stocks higher Tuesday and resist the urge to take profits from weeks of rallies.
John M. Berry
Washington Post Staff Writer
Greenspan No 'Major Evidence' of Growth. Reiterates Concern Over the Threat of Deflation
You sometimes wonder what the news organizations are thinking, don't you?
Last Friday, ABC News kept reporting that consumer spending was down 0.1% in April, stating this was an ominous sign of weakness in the economy, and that if the economy is to move forward it will be because of consumer spending.
Well, there were a couple of problems with that report.
First, the biggest drop in consumer spending came from travel and related sectors. But the reason behind that was clear: nobody wanted to fly during the war, and SARS was putting a damper on vacations.
Second, it's not true that consumer spending will lead the economic revival. Consumer spending has been strong for three years, and the economy has been struggling. Clearly, it's been struggling for other reasons. ABC could have made the point that faltering consumer spending might mean the last support for the economy is about to go, but that's not the point it made.
Third, there were some great pieces of economic news -- like manufacturing indices showing expansion -- that ABC simply refused to report. And it's going to take a revival of capital investment in order to really turn things around.
But the stock market paid attention to the real news, and was up some 140 points that day.
Still, you wonder whether ABC's agenda is political (that is, trying to make Bush look bad or trying to undermine support for a tax cut) or simply sensational (reporting bad news for the sole purpose of scaring people into paying attention to what ABC is saying).
Posted by: Steve on June 4, 2003 12:36 PM