Our 24/7, second-by-second micro-analysis of how “the economy is doing” continues to leave the big picture, whatever it might be, more fuzzy than focused.
For example, who to believe with this month’s number crunching? The Wall Street Journal reports, “Consumer spending keeps rising,” saying the largest such increase since October and eight straight months of gains are easing concerns about the recovery. Adjusting for inflation and factoring out such things as the rise in gas prices, consumption rose 0.3 percent, the Commerce Department reported.
“Consumers could have endured these higher (gasoline) prices by cutting back on discretionary purchases, but they did not,” Ken Mayland, president of ClearView Economics, told the Wall Street Journal.
On the other hand, the Associated Press reports: “Americans spending more, but it’s mostly for gasoline.” Using the same Commerce Department numbers, the AP concludes: “(Gains in consumer spending and personal incomes) also illustrated how higher gas prices are stressing household budgets. After adjusting for inflation, spending rose just 0.3 percent.”
The pro-business Wall Street Journal makes 0.3 percent sound optimistic; AP feels the need to throw the modifier “just” in front of the number.
(We’ll inexpertly wonder how steady, conservative consumer spending can be anything but a good thing.)
We’ll also ding the AP report because it contains this completely unattributed paragraph to support its thesis that gas prices are hurting the recovery: “Most people don’t have the luxury of deciding to buy less fuel. They have to get to work. So they spend more on gas, and less on other goods and services — from household purchases to restaurant meals to vacations — that do more to drive U.S. economic growth.”
It’s simply untrue that most people don’t have the luxury of deciding to buy less fuel. In 2008, when gas prices ventured toward $5 a gallon, people drove less for the first time in years. They carpooled and took public transit. They bought more fuel-efficient cars. And while many people did alter their gas-buying behavior, many did not — you can see them speeding down the freeway in gas-guzzling vehicles. Apparently it’s a luxury they can afford. (Or not. Gas stations do accept credit cards.)
Meanwhile, in other economic news, articles inform us that “New and existing home sales down again.” But they don’t mention that “11.4 percent of all U.S. homes are vacant” — information that acknowledges a housing glut — which would, indeed, affect new home sales.
“Consumers,” as we are known, might find that reports connecting some economic dots (while adjusting for human error) are more informative than solo economic findings and one-size-fits-all pronouncements.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
