Monday, September 3

Dueling Studies: Labor Day Blues Or Silver Lining?

According to the New York-based Conference Board, consumer confidence fell to 60.6 in August, down from a revised 65.4 in July and the 66 level analysts were expecting. As published by USA Today, the index now stands at the lowest it has been since November 2011 at 55.2.

But according to the Thomson Reuters/University of Michigan, the final sentiment index climbed to 74.3, a three-month high, from 72.3 in July. As published by Bloomberg, this gauge averaged 89 in the five years leading up to the recession. (Bloomberg reported confidence was down a few days earlier.)

The causes are easier to understand. The economy is struggling under the weight of rising gas prices, economic uncertainty among business owners facing more regulatory burdens, and the high unemployment rate that remains above 8 percent (but is even higher when people who have stopped looking for a job are factored into the equation). There are other factors too.

Sentiment, on the other hand, is not only elusive but also relative to who you are, where you live, and what you read. We live in a world with too much information for its own good, and some of it is suspect.

How media selection can dictate consumer confidence and economic perception.

When you look at headlines from various news outlets, the message is as mixed as the reality. "Consumer sentiment is a bit brighter in August," reads one. "Consumer confidence takes unexpected fall," reads another. "U.S. consumer confidence rises but outlook still grim," claims one. "Consumer confidence crash stifles gains from housing report," states another.

None are wrong or right. The variations in reporting are dictated by which studies are reported, how they are reported, headline semantics, and in-story sources. It's kind of a mess.

But the point here is that dueling studies and sources, along with what people share across social networks, can skew how people see the world. People are more likely than ever to self-select the reality they want and then see all of the other media outlets as biased.

At the same time, the media have increased its own online analytics, carefully tracking what people are looking for and then delivering based on those results. If one story gets more attention than another, someone is sure to say "we need more like that." This isn't really new, but it does seemed pronounced.

How individuals can navigate the influx of communication overload.

Without a doubt, relying on affirmation media will bias an individual's perspective even if the media stories themselves are not intensionally biased. Instead, it's best to develop a slate of media outlets that challenge ideas as much as confirm them. Once you focus in on a story, check up on the sources.

When most people read news stories, there is an assumption that the newspaper has already vetted the source. This isn't always the case. So when it comes to business stories in particular, take a few minutes to look up the sources. Even if the journalist isn't biased, the sources within the story might be. If they are, you can weight their contributions accordingly.

Along with those sources, find a few more on your own as well as any your social connections might turn to from time to time (preferably with ideas that confirm and challenge your own). This composite of information can be augmented and adjusted based on your geographical location, industry, company, and individual anecdotal observations (adjusting for your own bias).

When it comes to the economy today, nobody really agrees. Most of it depends on what indicators people want to focus in on to prove their point. The real tells are a little bit different. Most people don't feel better off than they were four years ago, which is what continues to shake consumer confidence. Even those who might be better off on paper, feel pinched because the same money doesn't go as far.

At the same time, this doesn't necessarily mean that the news stories ought to influence individual and business decisions. Some companies do very well in a recession while other do not. Some local economies are recovering and some are not. In other words, while individuals and small business owners can think of the news as the canvas they paint their story on — the story is still their own.
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