One of the challenges in deciphering online news is that a catchy headline is often peddled instead of the actual story, something fully on display today in a NYTimes article.
As an exercise to demonstrate this, read the headline below and stop to consider your emotional and intellectual response:
“Wall St. Hiring in Anticipation of an Economic Recovery”
Allow me to pull a couple of important sentences from the article for you to consider:
“Since employment bottomed out in February, New York securities firms have added nearly 2,000 jobs, a trend that is also playing out nationwide at financial companies, commodity contract traders and investment firms.”
Okay this is good, right?
“Though the figures are small in comparison to overall Wall Street employment, executives, economists and headhunters say they expect the growth to pick up steam in the coming months.”
Okay so maybe not so good… and on what basis do “economists and headhunters” expect growth to pick up? Dunno, the article doesn’t say why or how.
“The financial work force in New York has shrunk by more than 28,000 since its peak in January 2008”
So what exactly would suggest to the author that economic recovery is causing the hiring, even if the numbers are conservative we are talking about less than 10% of the jobs that were lost?
“The shift underscores the remarkable recovery of the biggest banks and brokerage firms since Washington rescued them in the fall of 2008, and follows the huge rebound in profits for members of the New York Stock Exchange, which totaled $61.4 billion in 2009, the most ever.”
Okay so now the picture is a little clearer, Wall St. firms are sitting on an enormous pile of cash and they have opened the hiring spigot to what amounts to a drip… and near the end of this article we learn the obvious. Of course I’m assuming they have a big pile of cash… one of the peculiarities of our modern accounting system is that cash flow and profits can diverge substantially, but here is yet another area where business media is very weak in coverage.
“As the nascent increase in jobs suggests, the recovery is still very fragile. And executives say it could halt or even reverse if earnings reports for the second quarter, which begin this week, are disappointing.”
So I’m left wondering what exactly makes this journalist think that a weak hiring number (remember as well that natural attrition in this industry means that all the hires aren’t even net new jobs) indicates forthcoming economic recovery when it mimics so many other industries in that companies have very strong balance sheets but are not adding jobs en masse. Also it is worth pointing out that just a few paragraphs earlier “economists and headhunters” said that expected hiring to pick up without the all important qualifier that it’s all “very fragile” and prone to a reversal if earnings reports are disappointing.
This is what passes for drive by journalism today, a headline that is technically accurate but disconnected from the content of the article it leads. Back in the day, when newspapers came exclusively with dirty fingers, such issues were less critical because newspapers delivered the news content with the headline as a unit.
Today the headline stands independent of the full content article, and thanks to search engines and news aggregators we get a lot of our news in headline format only… we’re a generation of skimmers not readers and in this context the example I laid out above is far more serious because taken independently the headline actually contradicts much of what was written in the article and therefore delivers a completely different message than what the author intended.