Economy Soars While Media Repeats Jobs 'Expectations' Narrative
Reprinted with permission from PressRun
The U.S. economy just set the record for the most jobs created in one year, but you’d never know it from the continuing doomsday economic coverage under President Joe Biden.
The new jobs report, released last Friday, offered the latest evidence of the purposeful disconnect the media maintain, and specifically how journalists rely on consistently unreliable “expectations” for job report numbers in order to portray the results as “disappointing,” and to paint a picture of a faltering U.S. economy even as it shatters growth records.
The U.S. economy just posted 199,000 new jobs in December, during a pandemic surge. That sounds like a good thing, right? Especially considering that in December 2020, under Trump and during another wintertime pandemic surge, the U.S. lost 140,000 jobs. Instead, the press was uniformly pessimistic about Friday’s news.
It was a “major disappointment,” CNN announced, despite the fact employee wages hit record heights and the unemployment rate tumbled to 3.9 percent. (Last winter, the CBO predicted it would take five years for the U.S. to reach an unemployment rate that low.) NPR stressed the US added “only” 199,000 jobs. Hiring had “faltered” the New York Times reported. All because the key number failed to meet estimates.
The expectations game is set by economists and banks which publish their estimates on the eve of each job survey. It’s an easy-to-use model the press has employed for decades to analyze monthly results. But economists’ expectations no longer work during the pandemic. They’ve been wildly inaccurate during the Biden recovery and should no longer serve as the determining factor in how jobs reports are presented by the press.
“During one of the most volatile periods in recent memory, private and public-sector economists have a less firm grasp of what the labor market is doing,” the Wall Street Journal recently conceded. During 2021, economists cumulatively missed the jobs mark by well over 1 million jobs. And that’s in a year when the U.S. created more than 6 million jobs, the most since records began in 1939.
The expectations model often produces dubious journalism. When last November’s job report was released, NPR quickly announced it was a “bust” because just 210,000 jobs had been created. But back in January of 2020, NPR cheered that the U.S. economy was “revved up” because 225,000 positions had been added.
Why the drastically different NPR spin for the Biden and Trump years? Expectations. Trump’s 225,000 job gains surpassed that month’s modest expectations, while Biden’s 210,000 fell short of estimates.
Another key hurdle is that the government has shown for the last year that it chronically undercounts, by large margins, the job gains data that are released to the public, and when it goes back and quietly post revisions they’re mostly ignored by the media.
August was a perfect example. That month’s initial jobs report claimed 235,000 jobs were added, which prompted lots of “disappointing” news coverage based on the established expectations. That total was soon revised all the way up to 483,000 new jobs, a development that received little press attention. Look at last September. The initial report announced 194,000 jobs. (“Lackluster,” announced NBC News.) After two revisions, the job total nearly doubled to 379,000.
Why the big revisions lately? Each month, the Bureau of Labor Statistics surveys 145,000 employers, extrapolates data, and produces an initial estimate of monthly job gains or losses. Lots of employers don’t initially reply, so the BLS goes back a second time, which produces the revised number. The problem is that during the pandemic, the percentage of employers who are responding to the survey has dropped dramatically, which means the initial numbers are less reliable. Yet those numbers are still the ones the press blasts out in headlines the first Friday of every month, when the unemployment figures are released.
It’s a one-two combo: The BLS is regularly undercounting jobs, which is bad news for the White House, and economists are regularly overestimating what the monthly BLS jobs number will be, which is also bad news for the White House. Then when the BLS revises the monthly gains, the media are nowhere to be found.
Wash, rinse, repeat.
That means Biden just oversaw a stunning jobs-creation year, while consumers were constantly fed headlines about “disappointing” jobs reports because the initial reports didn’t align with skewed “expectations.”
There’s also the lingering suspicion that the press simply likes to tell bad economic news — and hide upbeat newsflashes — during the Biden years. Just look at this pretzel-logic headline from the Washington Post on January 9, “2021 Shattered Job Market Records, But It’s Not as Good as it Looks.”
When last summer’s blockbuster July jobs report showed a jaw-dropping gain of nearly one million jobs, “NBC Nightly News” completely ignored the development. NBC did the same thing for the October survey, which announced a robust 531,000 jobs. It certainly feels like there’s a preferred media narrative in play.
The current approach for how the press handles monthly jobs reports isn’t functioning as it should. So why do journalists stick to the broken model?