That’s certainly how the mainstream media spun it. But as was the case with the April CPI data, the mainstream spin didn’t necessarily reflect reality.
In fact, there is a pro-government, pro-official narrative bias that pervades the mainstream media, including the financial media.
The CNBC headline declared, “Wholesale prices rose just 0.2% in April, less than estimate as inflation pressures ease.” A subheadline gushed, “Headline PPI rose just 2.3%, down from 2.7% in March and the lowest reading since January 2021.”
Seems wonderful, right? But the headlines ignore important context.
Stripping out all of the spin, the data shows that producer prices were up modestly in April.
Excluding food and energy, the core PPI also rose 0.2%. This was in line with expectations.
In February and March, wholesale prices really did plunge, contracting by -0.2% and -0.4% respectively. You can certainly argue that those two months reflected cooling price inflation pressure. But in April, the PPI increased by 0.2% coming off those two months of declines. One could easily argue that the downward cooling trend reversed in April.
I didn’t see one mainstream financial news source make that point.
Producer prices are generally considered a leading price inflation indicator. Consumer prices typically lag behind producer prices. Before businesses can pass on their higher costs, to their customers, they have to experience those higher costs themselves.
Last month, producers experienced higher prices. That would seem to warrant at least a little concern that inflation isn’t quite whipped. But all we got from the mainstream was breathless optimism.
As I talked about in my podcast last week, there seems to be a disconnect between media reporting and reality.
If you read the headlines, you’d think inflation is toast. It was a great CPI report. The Fed is winning the inflation fight. Everything is going to be OK. The Fed is about to pivot. Here’s an example of a typical headline. ‘Consumer Prices in April Rise at the Slowest Annual Rate in Two Years.’ That’s great, right? Fantastic news! Inflation is cooling. But if you read about two lines into the actual BLS data, you know this is utter BS. Inflation isn’t on the run. It’s sticky. Every indication is that it’s going to be around for a long time.”
The PPI data doesn’t do a whole lot to change my mind.
Peter Schiff also talked about bias in the media during a recent podcast, saying it fails both investors and the public.
As far as the CPI data goes, Peter said everybody is looking for some indication that price inflation is coming down despite the fact that all the evidence is that it’s not.
Even though it is not as high as it once was – at one point we were looking at 9% year over year and now we’re just looking at 5%. But five is still a high number. Five is way above the 2% target. And for those of you who don’t recall, when Nixon imposed wage and price controls back in the 1970s, the initial controls went in when inflation was above 4%. They didn’t wait for it to be double-digit. It was 4% when they were panicking. Well, we’re well above that now. So, to say 5% represents some type of success because it’s not nine is completely wrong.”
And that’s not even taking into account the fact that if the government says the CPI is 5% it is closer to 10%.
Peter said he thinks we are at “trough CPI.” A deep dive into the CPI data that we published seems to support his conclusion.
But again, we see no discussion of such things on CNBC, Fox Business, or in the Wall Street Journal.
Toward the end of his podcast, Peter talked about an article published by The Atlantic about the DC Solar Ponzi scheme run by Jeff Carpoff. Peter said the article completely missed the point that the government was ultimately responsible for the entire situation.
It is just more proof that we don’t want the government involved in the economy. We don’t want government picking winners and losers when it comes to business because it just picks losers.”
President Biden actually made DC Solar a partner with the federal government in the battle against climate change. DC Solar was also the beneficiary of a federal tax credit. Peter explained how Carpoff used this tax credit as the basis for his entire scheme. The bottom line is that the federal government literally made the scheme possible.
I’m reading this whole story and not once does this guy [the author] blame the government. It’s all ‘this bad guy who took advantage of the taxpayer. He ripped off the taxpayer.’ No. The point of the matter is the government made all this possible. The government created the tax credits. Look, whenever the government does something like this, it’s going to be abused.”
Whenever the government creates a freebie, people will rearrange their circumstances to take advantage of it. In effect, the government distorts the market.
But the media never reports on this. It always talks about these government programs in glowing terms. And when the government program creates problems, it’s always somebody else’s fault.
It’s completely lost on the journalists at The Atlantic because none of these guys are suspicious of government. They probably look at this and say, ‘Just another greedy capitalist ripping off people, ripping off the taxpayers. No. This is an example of government ripping off the country – of why government needs to get out of the business of picking winners and losers.”
We see this kind of media bias all the time. It’s a bias for government. It’s a bias that trusts official narratives. It’s a bias that is always seeking to prop up the powers that be, whether it’s spinning economic data to look better than it is or ignoring government malfeasance.
**By Michael Maharrey