Recession hysteria at the NY Times

Alan Reynolds:

HOW bad does economic reporting get in a presi dential election year? Consider last week's performance by The New York Times.

Exhibit No. 1: All the papers, not just the Times, made a huge deal out of job losses during last two months of 22,000 and 63,000. The latter figure, the Saturday Times exclaimed, is "the biggest monthly loss in five years."

In fact, five years ago - January to August 2003 - nonfarm payrolls fell by 444,000. Did that massive job loss in 2003 mark the start of recession? Of course not.

Yet New York Times writer David Leonhardt declared an "End to the Good Times" on March 8 by claiming three consecutive months of job loss (it was actually one or two months, depending on which survey you use) proves "recession . . . is now unavoidable."

If that were true, then 2003 should have been the start of a really nasty downturn. Indeed, Times columnist Paul Krugman, in an interview with Rolling Stone that May, announced the economy "is, for all practical purposes, in recession - whatever they say officially." The economy has added 8.2 million payroll jobs since then.

Today's hysteria looks even more absurd if you dig into the data. Only half the unemployed in February had actually lost a job, and a fourth of those were temporary layoffs. The rest either quit or did not have a job before.

And half the unemployed were out of work for fewer than 8.4 weeks - down from an average of 8.7 weeks during the prior four months. Only 17.5 percent had been unemployed for 27 weeks or more - down from 19.3 percent in November.

Finally, only 4.8 percent said they were unemployed - well below the 5.8 percent average since 1960. Adding discouraged workers - those who say they've stopped looking for a job out of frustration - just lifts that jobless rate to 5.1 percent.

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There is more.

I sensed this, but Reynolds has put in the hard work of gathering the data to expose the hysteria. There is much more in his piece which is worth reading in full. I think one of the reasons for the hysteria at the NY Times is its own under performance. It is as if it is grabbing onto bad news to explain why its performance has been so bad over the last seven years. That is easier than taking responsibility for their own poor financial performance.