The inside story on business reporting

John Wihbey of The Journalist’s Resource recently spoke with Greg Ip, the U.S. economics editor of The Economist, about his job.

Here is an excerpt:

JR: What are some pitfalls that young economics reporters should watch out for?

Greg Ip: Let cover a few things that are especially important for journalists.

Number one is the failure to consult the original source. It is amazing how many times you can read something, for example, in a news report or blog post and think you know what they’re saying, and then you just quote it – maybe changing a word or two. And then you realize you’ve completely misinterpreted it. As often as possible, you need to go to the original material. For example, if someone is talking about the unemployment numbers, don’t just quote from somebody’s news article. Go to the Bureau of Labor Statistics itself. You’d be surprised at how often, looking at the raw data itself, the numbers are saying something different than you thought. And you often find something that you didn’t realize before in the numbers.

Also, be careful when you’re quoting a policymaker – for example, when the President addresses the country or gives an interview or makes off-the-cuff remarks at an event. Sometimes only one sentence or two will make it into the news. But when you consult the entire context of what was said it’s often a lot more interesting, and the context makes what was said very valuable. By the way, that’s true in all journalism, not just economic journalism

JR: What about specific errors to be mindful of?

Greg Ip:  People often confuse levels and rates of change. For example, people will often say, “Inflation rose last month by 1.7 percent.” What they meant was prices rose 1.7 percent. Inflation is itself a measure of a rise or fall. So inflation is 1.7 percent. That issue to a lot of people isn’t intuitive. You see similar misunderstandings when people talk about the debt and the deficit, or the difference between a stock and a flow. So you can have a debt one year and a surplus at the same time. How is that possible? It’s because you started with a debt of $100, then had an annual surplus of $2, so you end the year with a debt of $98. If you started with a debt of $100 and you ran a deficit of $2, you’d end up with a debt of $102. You need to understand these differences.

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