No wonder we're so confused
3-Jun-05. This morning I received two news emails that authoritatively reached opposite conclusions from the same fact: employers added 78,000 jobs to payrolls in May. It's a wonder anybody knows anything.
The first email came from MarketWatch.com, formerly owned by CBS but now owned by Reuters.
Stock futures pointed higher Friday after data showed the U.S. economy added far fewer jobs than forecast in May, possibly signaling an end to interest rate hikes by the Federal Reserve.—Before the Bell
The second email came from Reuters News.
Employers added only 78,000 workers to their payrolls last month, the weakest job growth in 21 months, the government said on Friday in a report that fanned worries on Wall Street over a slowing economy.—Reuters U.S. Top News Early Edition
Same fact, opposite conclusion.
First off, far too much importance is attached to these employment forecasts, aka "expectations." I don't know how you can even pretend to predict these things other than by making an educated (presumably) guess based on the last couple of months, taking into account known seasonal trends. Consulting tea leaves or pig's entrails would probably be as reliable.
But what is really astonishing is how far out on the limb of speculation and inference these news organizations went from that one little fact.
• MarketWatch attributes a causal relationship between the jobs data and stock futures. If I recall correctly, in rhetoric this is the post hoc ergo propter hoc fallacy.
• Reuters uses some psychological divining rod to detect collective worry on Wall Street that is being "fanned" by this data.
At least MarketWatch uses the qualifier "possibly" in their lead. Reuters simply makes a definitive assertion. Both have made a giant leap from the basic fact they have to report, making both essentially worthless.
This is really all about the need to fill space. There is simply too much news capacity compared to the amount real, solid news available, so publishers put out dubious claptrap like this.
Major newspapers all around the country are wringing their hands over declining circulation numbers. Partly this is due, I suppose, to the proliferation of alternative sources of news. And the fact that so many of them provide online versions of their papers for free undoubtedly contributes. But try some of these on for size: the obsession with celebrity and sensationalism; the fact-free nature of many "news" articles; the unrelenting attack by the White House on the news media; the recent revelations of fabricated and sloppily verified reports.
And then there is my own pet peeve: if I go to the newstand and pick up two or three major city newspapers, I'm carrying several pounds of paper! And at least 90% of it will go into the trash can (recycle bin) untouched because it is advertising or of minimal interest. It's a colossal waste, not to mention that it leaves your hands and everything else smudged with ink!
News magazines are little better. I subscribe to Time magazine, largely because I got a really, really cheap subscription price a couple of years ago. But I won't renew it, because Time has morphed into People magazine. There's little you can sink your teeth into. It's far more informative to watch the News Hour with Jim Lehrer and the Daily Show with Jon Stewart!