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Saturday, June 28, 2014

Don't mind the man behind the curtain. I am the great and powerful OZ. GDP doesn't matter. Deficits don't matter. Structural Unemployment doesn't matter. Wage growth doesn't matter....

The virtues of ignoring GDP

Dropping a bad habit

Jeroen van den Bergh | April 13, 2010
It is now widely recognized that GDP has many shortcomings as an indicator of social welfare. It is time for macroeconomists and policy makers to finally take action.

Here’s Why a Decline in GDP Doesn’t Matter One Bit

The details weren't bad, and the data was old, so investors should look ahead

Why GDP doesn’t cut it anymore

By Heather Gautney, Special to CNN

CBS Tries To Spin ‘Nasty’ GDP Data; ABC, NBC Ignore -2.9 Percent Drop

Despite dramatic economic downgrade, ‘Evening News’ gives little more than a minute to GDP.
After downplaying bad economic news for months, the broadcast networks continued their head-in-the-sand approach once again.

The Bureau of Economic Analysis (BEA) revised earlier growth estimates sharply downwards. It announced on June 25 that found the U.S. economy actually shrank at an annual rate of 2.9 percent during the first three months of 2014. Despite this grim statistic, only CBS’ “Evening News” covered it, of all the broadcast network morning and evening news shows in the first 24 hours after the data was released.

CBS only spent one minute and five seconds on the news. It worked desperately to find a silver lining, predicting “brighter days ahead” and a “strong rebound in the second quarter.”
Anthony Mason, senior business and economics correspondent, pointed out that it was the “worst quarter since 2009.” The first estimate, on April 30, found that economic growth had declined from 2.6 percent in the fourth quarter of 2013 to an estimated 0.1 percent for the first quarter of 2014. That was already revised downward to -1.0 percent on May 29. 

ABC and NBC have consistently ignored GDP data in recent months. Only CBS covered the weak GDP after both previous estimates.

On June 25, CBS dismissed the troubling estimate, pointing to strong jobs, housing data and auto sales for the next quarter. Mason assured his audience that, “the latest numbers suggest we’ve had a strong rebound in the second quarter which ends Monday.” While Mason admitted the economy was “vulnerable,” anchor Scott Pelley said, “but brighter days ahead at the moment.”

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