Numbers, Facts and Trends Shaping Your World

Tracking the Economic Slowdown

Conclusion

The public’s role in some news events is more significant than in others. It is the voter who decides elections. By contrast, news of a pileup on the interstate may be significant, but what consumers think about it will have a limited impact on the event.

The economy is one of those stories in which public attitudes play a central role. Is the economic slowdown simply in our minds, as former Senator Phil Gramm suggested? Perhaps not entirely. But to some degree, of course, all recessions, just as is true of all bull markets on Wall Street, are significantly influenced by consumer psychology. And the information the public is operating by is a major determinant of that psychology.
    
In the current economy, the public was focused on this story in some ways before the media. Local media, and national print, seemed to sense the story first. And the tendency of television media to tell the story of gas and energy prices, ahead of other elements, is influencing public perceptions of what is at the root of the economic slowdown.

That psychology is also influenced by an elusive timing embedded in the way the media learn about economic events. With its reliance on government data, much of our understanding of the economy is delayed. And a modest recovery might be occurring while the news, linked backwards to the previous quarter, is highlighting a slowdown.

The result is a partial, perhaps even blurry image, parts of an elephant, photographed at different times, pieced together after it has already moved.

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