Spin, spin, everywhere spin

When reading the news these days, I must remember to bear in mind the motivation of the entity that disseminates it. Faux News, of course, has an ideological bent that renders its "news" tainted, a taint readily discernible. More difficult to remain aware of, however, is the spin that is applied even by so-called "hard news" outlets, such as those that report economic developments.
Take for example, this story from today's Dow Jones wire, reporting the status of inflation as recently reported by the Labor Department.

The "gist" of the story is stated in the opening paragraphs thus:

"The consumer price index rose a scant 0.2% in December, reversing 0.2% decline in November, the Labor Department said Thursday. The closely watched core index, which excludes food and energy prices, rose 0.1%. In annual terms, consumer prices rose 1.9% in 2003, the smallest rate in two years."

An upbeat development, it would seem, until one reads to the final paragraph of the story, where the truly significant statistic--the fact that impacts most Americans--appears.

"In a separate report, the Labor Department said average weekly earnings of U.S. workers, adjusted for inflation, declined 0.6% in December as a 0.2% increase in average hourly earnings was more than offset by a 0.6% decline in average weekly hours and a 0.2% gain in the CPI for urban wage earners and clerical workers. Over the course of 2003, average weekly earnings rose 1.7% on a seasonally adjusted basis."

So, what really happened in December was that there was a tiny uptick in the price of consumer goods (the CPI), an identical increase (0.2%) in average hourly earnings--a wash--but a decrease in workers' weekly earnings because of fewer working hours. The result: A net loss of workers' purchasing power over the last month of 2003. This decline capped a year in which workers' earnings grew a "scant" (to borrow the word from the opening paragraphs of the article) 1.7%, which is actually one-tenth of one percent less than the increase in consumer prices (1.8%) over the year. So the working consumer ended the year with a worse month than the year as a whole, and the year was one in which the worker consumer lost ground against prices for consumer goods.

The upbeat tone of the article can be accounted for by Dow Jones' bias. It's in the business of business, of trading in stocks and commodities, of benefiting from borrowings and investments and of reporting same. If the news is downbeat, its various functions lag. Moral: Read the entire article--including the bottom "graph"--and more than one article, on any subject. Or--don't read anything. Just look around you and see what's happening.