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  • rmacculloch

More Kiwi Media Misreporting on the Economy

The main news headlines by the editors of many of the major outlets, including the Herald & Newshub, run as follows:


Omicron slams economy - GDP falls 0.2 per cent in first quarter


GDP falls 0.2 percent, demonstrating Omicron's blow to economy


The question is - are these articles being deliberately sneaky? Are they deliberately trying to spin the news? Or are these headlines innocent mistakes? To be clear, all that was released today were the latest GDP numbers, which show the economy going backwards. To work out what was the cause of the contraction is a very difficult endeavor, involving sophisticated statistical analysis. Not one "expert" who has commented on this drop in GDP has any scientifically-based explanation as what was the fundamental cause - they're just expressing off-the-cuff dinner-table-style opinions.


Who knows why GDP dropped? Maybe there's been a loss of confidence on behalf of the public as to how the nation's affairs are being conducted? Since so much psychology is involved, its obviously hard to identify. So why assume the cause is .. Omicron?


Incredibly, Stats NZ says that the primary driver of the GDP drop was "primary industries" in which economic activity "fell in the March 2022 quarter, down 1.2 percent ... Mining was the largest contributor to the fall, down 8.9 percent ... The fall was driven by .. mineral mining & quarrying; and exploration and other mining support services. Fishing, aquaculture and agriculture, forestry, and fishing support services were down 4.8 percent in the March 2022 quarter, following a 1.1 percent fall in the December 2021 quarter".


What does mining have to do with Omicron? "Goods-producing industries" also fell 0.1%. However services "remained flat". But it is services that should have driven the drop in GDP if Omicron was to blame. In fact, education services were sharply up! So why didn't the media say, "Government's anti-mining policies slam economy"? I don't have a clue if they have, but our media also has no clue about the link between Omicron & these GDP figures.


Maybe a "commentator" who "knows" the cause is Omicron can show me a "regression equation" which they have estimated that explains GDP in terms of dozens of variables, and identifies the one called "Omicron" as the driver.


Sources:

https://www.nzherald.co.nz/business/omicron-slams-economy-gdp-falls-02-per-cent-in-first-quarter/STWAN4FDWSPOBRBDGMDBXWCFEI/


https://www.newshub.co.nz/home/money/2022/06/quarterly-gdp-falls-0-2-percent.html


https://www.stats.govt.nz/information-releases/gross-domestic-product-march-2022-quarter/