Biz media already predicting recession

Chicago Tribune public editor Timothy McNulty writes Friday about how many in the business media are writing as if the country is already in a recession.

McNulty wrote, “There is a legitimate concern that the economy is slowing down — witness Thursday’s 307 point drop in the Dow Jones industrial average — but reality is that no one has the evidence yet that a recession has even begun. (The definition of recession is two consecutive quarters of economic contraction; you don’t know a recession has begun until you are already into it, or until it’s past.) Economists are just now learning December’s economic growth numbers.

“Journalists, however, assume a recession is under way and most of the economic stories reflect that. Another headline in Monday’s Wall Street Journal, in the ‘Abreast of the Market’ column, offered tips for stock investors with the headline ‘History lessons: Past recessions yield a few clues.’

“The point here is to be wary of all predictions. As noted economist Paul Samuelson wrote in a Newsweek column in 1966: ‘Wall Street indexes predicted nine out of the last five recessions.'”

Read more here.