The GDP Shrinks and the Media Discusses Poor Government Data

It still amazes me.  When we get good economic data that seems questionable on its face, the media never mentions the issue of reliability.  On the other hand, when we get bad news, the media falls all over itself to tell its readers that the data could be faulty.  For example, when we learned that government workers had made up some of the data used to calculate unemployment statistics that seemed too good to be true, there was essentially no coverage.  Today, the data issued new data on GDP that show the economy contracted by 0.7% last quarter, and every report that I have seen mentions that some people question the reliability of the government statistics.  None of the reports mention actual problems with the way the data has been compiled, just that there are unspecified questions.  Perhaps the most blatant example of this phenomenon came in a Bloomberg News article that mentioned that statistics showed that income rose slightly during the last quarter even as GDP declined.  Those two figures should move pretty much together although there can be timing differences that would account for the small difference here.  Bloomberg, however, says that the difference could indicate that the GDP data is incorrect.  That's all they say.  The reality, however, is that the difference could also indicate that the incomes data is incorrect and that the GDP data is correct.  Indeed, the difference could indicate nothing at all about the accuracy of these figures.

The truth is that the poor GDP data indicates only one thing for certain:  the US economy was in bad shape during the first quarter.  No matter how one slices and dices the numbers, a decline is a decline.  Particularly when you add in the decline in corporate profits (which confirms the GDP decline) one knows that the first quarter results were really poor.

It would be good for the country if the media stopped trying to make things look better for president Obama and just told the truth.