Biz journalists and GDP don't mix
TheStreet.com’s Marek Fuchs points out that there’s been another quarter where the Gross Domestic Product was revised a significant amount, meaning that coverage of the initial number was misleading to readers because it failed to note that revisions are a regular event.
Fuchs wrote, “GDP numbers are originally reported as set fact. A myriad of conclusions are drawn from the initial report, even though the numbers are revised significantly on a regular basis.
“Then the revision comes out, and guess what? The business media matter-of-factly report the revision, drawing a whole new myriad of conclusions.
“The business media win: They get double the copy from what should be one number and one set of conclusions.
“But investors lose. They get lulled into thinking a recession is imminent when one isn’t. Or that the economy is starting to overheat when it’s not.
“You can read some of my past work to see how canyonwide the gap between initial reports and revisions are — and how misleading those original headlines and articles tend to be to investors merely looking to get a bead on the economy.”
Read more here.