CAP Action Media Analysis: Focus on inflation ignores substantial economic gains made under Biden this year.
When gauging an economy’s health, economists typically look at a variety of indicators including: output (GDP), employment (jobs), prices (inflation), consumer spending, consumer confidence, household incomes, household savings, wages, and the stock market.
While nearly all these indicators are outperforming forecasts and pointing to a strong recovery, disproportionate coverage of price increase (inflation) has eclipsed discussion of the rest, leading to an overly bleak and inaccurate picture of what is an unprecedented economic recovery.
Using the Stanford Cable TV News Analyzer, a tool that tracks screen time of search words, and NewsWhip Analytics, a separate tool that tracks social media engagement with news stories, CAP Action analyzed how strong mainstream cable news channels and online media focused on inflation versus other economic indicators.
We found that in the month of November the terms “inflation” and “prices” garnered 50% more screen time on CNN and MSNBC than mentions of these terms: “unemployment”, “employment”, “wages”, “jobs”, “jobless”, “consumer spending”, “GDP”, “income”, “stock market”, “wage growth”, “job growth”, and “economic growth” combined.
While inflation is indeed higher this year, and that does warrant increased coverage, other economic indicators are doing well and deserve emphasis such as:
● a sinking unemployment rate that recently fell to 4.2 percent, over two years ahead of CBO’s previous predictions;
● nearly 6 million jobs added so far in 2021, more jobs than any other year on record;
● initial weekly jobless claims hit a 52 year low in late November;
● disposable income that is $380 higher for the average American than in 2019 pre pandemic;
● wage growth, which has outstripped inflation for most workers (the bottom 70%); and
● GDP growth, which grew far quicker than any other developed economy.
Additionally, an analysis of data compiled by Bloomberg Editor-in-Chief Emeritus Matthew Winkler found that “America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years”. Winkler found that out of ten market and economic indicators, “no one comes close to matching Biden’s combination of №1 and №2 rankings for each of the measures.”
When taken together, this economic recovery is truly remarkable especially compared to prior economic crises. As Karl Smith of Bloomberg writes, “When the global financial crisis struck in 2009, Washington acted quickly to stem the collapse and prevent a repeat of the Great Depression. Then they largely dropped the ball. The recovery was slow, painful and resulted in millions of Americans becoming so discouraged that they left the workforce altogether.”
But in 2020, “The U.S. economy went into a brief recession because of Covid, but through a combination of fiscal relief and monetary support, nominal GDP is now back on track. As predicted, unemployment has fallen, hitting 4.2% last month, just 0.7 points higher than before the pandemic.” Smith also says that “Restoring nominal GDP to its pre-crisis trajectory is a real achievement, but it has unavoidably induced a period of rising prices”.
Meanwhile, the jobs market is booming, with unemployment claims down to the lowest level since 1969. Gallup polling in late October showed that nearly three-quarters of adults think now is a good time to look for a job, the highest share since it began asking the question 20 years ago and a remarkable recovery in the public’s views of the job market from its record 46-point plunge between January 2020 (68%) and April 2020 (22%).
Despite all this, Americans’ perceptions of the economy have become increasingly negative.
The consumer sentiment index fell to a decade low in early November data collected by the University of Michigan. Consumer sentiment among Republicans was worse last month than at the height of the financial crisis in 2009.
In 2019, PEW Research Center found that wages, job availability, and health care costs matter most in Americans’ assessment of the overall economy. Under Biden we’ve seen record job growth and low unemployment claims in the past few months, historically high wage growth for the first time in decades, and lowered healthcare costs for millions with even more savings on the way in his Build Back Better Act which would cap the price of lifesaving drugs such as insulin. Despite this, coverage of inflation on CNN and MSNBC in November has gotten nearly twice (1.8 times) as much coverage as jobs, wages, and health care COMBINED in the same month.
How Economic Coverage Today Compares with Coverage Under Trump:
During the Trump presidency, Trump repeatedly used jobs numbers and the stock markets as indicators of economic success. Under Biden, we’ve experienced an improvement in the unemployment rate from 6.7% last December under Trump to 4.2% this December, a reduction that took three and a half years in the last economic cycle (March 2014 to September 2017). And yet, “unemployment” OR “jobless” mentions on CNN and MSNBC are down 69.2% in 2021 compared to 2020. “Jobs” OR “job growth” mentions on cable news and online headlines are about the same levels as last year, despite stark improvements in both under Biden this year. The stock market has also seen record highs under Biden, with Biden seeing more S&P 500 record highs than Trump after his first year. Despite this, cable news networks CNN and MSNBC mentioned the term “stock market” 81% less in 2021 compared to 2020. And despite widespread supply chain problems under Trump in 2020, the online headlines with “supply chain” are up 131% in 2021, with “Biden” featured in “supply chain” headlines 507.4% more than “Trump” was in 2020.
The only indicator that has seen increased media coverage and increased association with Biden in 2021 compared to Trump in 2020 has been “wages”. Online news headlines mentioning wages have increased 43.1% in 2021 over 2020, with “wages” being featured with “Biden” 125% more in 2021 than “wages” and “Trump” in 2020. But despite Americans getting their biggest raises since 2008, research has shown that they don’t believe wage increases will outstrip inflation.
The Bottom Line
There has long been an inclination to rely on one or two pieces of economic data, like the Dow Jones Industrial Average or monthly labor market numbers, as shorthand for the economy’s overall health. While this has always been misleading, perhaps that has never been more true than during the COVID recovery. The massive, unprecedented public health turned economic crisis, has made for a recovery that is almost defined by uneven progress and simultaneous bright and trouble spots. Still, even in this uncertain time there is a lot of important good news this year that has not been given its fair share of spotlight in terms of coverage, namely strong labor market and GDP growth. Because news consumers plan their lives and their fortunes around what they hear from the media, they deserve economic coverage that is nuanced and complete. If news coverage of the economic recovery continues to overemphasize inflation concerns without also highlighting historically strong recovery in indicators such as jobs and GDP growth, it risks enforcing a negative feedback loop of economic doom that is not an accurate reflection of the economic progress the country has made under President Biden.