CNBC Misleads On Durable Goods, Jobless

It is my hope that one day the financial media will stand up on high moral ground and tell the investing public - those who are losing (or have lost) everything they own - the truth. Instead, they are misleading individual investors daily with “green shoots” and deceptive journalism.

Read this article from CNBC (owned by General Electric [NYSE: GE]) carefully: Durable Goods in Surprise Jump; Jobless Claims Dip.

Then read the article again with my emphasis in bold and my analysis in between the sections:

“New orders for long-lasting manufactured goods saw their biggest gain in 16 months in April and fewer workers filed for new jobless benefits last week, according to official data on Thursday that suggested the deep recession was abating.

The Commerce Department said new orders for durable goods rose 1.9 percent, the biggest percentage advance since December 2007. However, March orders were revised sharply lower, falling 2.1 percent from the previously reported 0.8 percent decline.“

March orders were revised down significantly to nearly 3x the level they were reported previously. How can we possibly believe the Commerce Department’s 1.9% estimation when they got it so very wrong last month? I promise you the April numbers will be revised in June, and they will not be pretty. But it sure makes a good headline for CNBC, right?

The article continues:

“A separate report from the Labor Department showed initial claims for state unemployment insurance dropped by 13,000 to a seasonally adjusted 623,000 in the week ended May 23, falling for a second straight week.

However, the number of people staying on benefit rolls after drawing an initial week of aid increased 110,000 to a higher-than-forecast 6.79 million in the week ended May 16.“

To put it another way, people who are losing their jobs are not finding new ones and the number was, of course, higher-than-forecast. But that would be too negative to put in the title of the article; instead they’ll simply bury it in the text.

“U.S. stock index futures pared gains after the data. Treasury debt prices briefly pared gains, while the dollar was flat.

‘The data is consistent with the view that the rate of contraction is slowing, but we are still working our way through a recession. We haven’t hit a bottom yet,’ said James Masi, chief fixed income strategist at Stifel Nicolaus in Baltimore.

The reports were the latest in a series that have raised optimism that the 17 month recession was starting to ease. Data on Wednesday showed an increase in the sales of previously owned homes.

But high unemployment, underscored by the Labor Department report showing that continued claims have set record highs in every week since Jan. 24, indicate that any recovery after the recession will be painfully slow.

Continuing claims are now more than double the level they were a year ago.“

Unemployment continuing to set record highs each week is an incredibly ominous sign of the dire economic situation we’re facing.

Let me shed light on something for you all who have been brainwashed by the financial media and government agencies: The unemployment rate during the Great Depression maxed out at around 25%. As of December 2008, the government, and kowtowed by the financial media, reported that the unemployment rate is around 7.8%. What they don’t tell us is that they’ve changed the way they account for unemployment since the Great Depression.

But wait, don’t fear, that measurement is still around. Indeed, it was the official measurement during the Clinton administration. As of December 2008, using the same measurement used during the Great Depression, unemployment was nearly 18%. And that was before record highs we’ve seen so far in 2009. It is very likely we’re nearing 20% now, not-so-far away from the Great Depression highs.

Check out this graph.

Pretty scary, right? No wonder the government and it’s media partners want to keep a lid on reality.

Freund Investing Managing Member Ryan Freund holds no position in any of the companies mentioned in this article. Freund Investing has a solid Disclosure Policy.