Reading the mainstream financial news you see phrases such as "better than expected" all the time. I have even seen the market rally on "not as bad expected".
I do sometimes wonder ..."expected" by whom? There is a diversity of opinions among economists, market watchers and even government economists as how to interpret economic data (more on that later).
This morning the market rallied because there was jobs data released that was Better than Expected! The US is still losing jobs but the initial claims for unemployment came in by 27K less than expected. And the market rallied.
But for anyone who looked a litte deeper - they might find a fly in the ointment. It appears that nine states (including a few of the worst off) did not provide real data on employment - the government made estimates. The fact that this data point was not released with the official figures at first surprised me (I think I'm past the stage of being shocked) and .... then it didn't. But it did.
Back to spin and "better than expected". So is the spinning of economic data a conspiracy to keep us peons from panicking (hey I'm reading Under the Dome right now), lack of decent financial journalism or just a willing ignorance? I do not know.
However, I conducted an ad hoc experiment using Google news (I firmly believe Google does not manually manipulate their news coverage but there is an algorithmic bias there - popularity feeds into popularity). I took the phrases "worse than expected" and "better than expected" and ran them through Google News Search with the terms "economy", "economic" and "employment" and recorded the number of news articles returned for each. The results are somewhat telling:
| Better than Expected | Worse than Expected | |
|---|---|---|
| Economy | 87.37% | 12.62% |
| Economics | 82.97% | 17.02% |
| Employment | 83.22% | 16.77% |
It looks like there is a bias ... but for now I will refrain from speculating as to where that bias is coming from.
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