U.S. Economy Again Defies Media Pessimism
December CPI numbers counter dire inflation predictions from the media.

By Ken Shepherd
Free Market Project
Dec. 15, 2005

     Lower energy prices have spurred a significant drop in consumer prices according to a December 15 report from a federal agency that tracks economic data. “On a seasonally adjusted basis, the CPI-U decreased 0.6 percent in November, its largest decline since a 0.9 drop in July 1949,” the Bureau of Labor Statistics (BLS)  reported in its December news release on the Consumer Price Index (CPI). The news is the latest in a string of good economic reports which have defied media pessimism on the economy.

     In October the Free Market Project (FMP) documented media fears of skyrocketing inflation supposedly caused by energy price spikes following Hurricane Katrina. At that time, reporters like CNN’s Miles O’Brien and NBC’s “Nightly News” anchor Brian Williams conjured images of high inflation from the 1970s. O’Brien joked that it was time to bring back the “Whip Inflation Now” campaign buttons while Williams, a former Carter White House intern, compared the inflation rate with that of the Georgia peanut farmer’s presidency.

     But in the December release, the BLS found energy prices down and inflation well in check. The drop in price of “petroleum-based energy more than offset a 2.1 percent increase in the index for energy services” in November. For the year thus far, the government agency noted, inflation stood at 3.8 percent while core inflation, which excludes volatile energy and food prices, stood at 2.1 percent, down slightly from the year before.

     The Free Market Project has previously documented the media’s persistent drumbeat of pessimism on the economy, including how network morning show coverage of a positive economy on December 2 was a one-day fluke.