The Dow Jones industrial average closed only 34 points away from its record high September 27, yet “NBC Nightly News” found a cloud to hide that silver lining.
“Wall Street is riding high on a wave of confidence about the economy,” said Chief Financial Correspondent Anne Thompson, before warning of “developments that could shake consumer confidence and perhaps Wall Street’s confidence in the economy.”
Thompson began with mention of the “cooling housing market and still high energy prices,” despite the fact that gasoline prices were at the lowest point since March 10, and NBC reported on September 26 that home heating oil prices have dropped 20 percent since September 2005.
Spinning the good news into bad, Thompson threw a big “but” into the report. “Today most companies have good balance sheets with strong profits and consumers are holding their own. But there are two potential problems: The first for consumers is housing … the other the downsizing of American automakers.”
Thompson’s unstated evidence of a “cooling” housing market was the 1.7 percent decline in housing prices since August 2006. But the National Association of Realtors projects that “correction” will continue only through the end of the year, according to NAR Chief Economist David Lereah [1]. Thompson also left out that housing prices have experienced a 60-percent increase in the past five years.
Contrary to her comments about job losses for American automakers, BusinessWeek [2] reported in February that auto manufacturing is doing fine. According to the article, while certain American automobile companies like GM and Ford are struggling in Detroit, others like Nissan, Toyota and Honda are growing and supplying Americans with work in U.S. factories.
Thompson also cautioned that this news might “shake consumer confidence.” A September 28 CNN poll showed just the opposite. CNN said 59 percent of people now think the economy “is in good shape,” compared with 44 percent in early September.