ROFLMAO

CNN Needs to Buy Its Economic Reporters Access to the Internet

BY DEAN BAKER

 MAY 14, 2024
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CNN endlessly runs stories on troubled consumers that are completely at odds with government data. While its sources may have useful stories to tell, the government statistical agencies construct their data based on surveys of tens of thousands of individuals and businesses. It is likely that the government data does a better job of describing economic reality.

In this vein, CNN ran a piece last week on how consumers could no longer afford to eat out at restaurants or even fast food restaurants.

“For a while, restaurant customers were trading down — swapping out expensive meals for cheaper ones, but still dining out. Now, some are responding to higher menu prices by trading out entirely: Instead of opting for cheaper restaurants or meals, they’re eating more at home and spending less when they do go out.

“That means that restaurants have to battle it out for these cost-conscious consumers. And now, it’s not just burger chain against burger chain.

“Because fast food joints have been hiking up prices in recent years, dine-in spots like Applebee’s can run promotions that end up costing about the same as a fast food lunch — giving them a chance to try to steal those customers away.”

This story of people no longer being able to afford restaurant people is 180 degrees at odds with the data from Bureau of Economic Analysis (BEA) on meals at restaurants. According to data from the BEA (Line 236), real spending at restaurants was 11.0 percent higher in the first quarter of this year than in the fourth quarter of 2019, the last quarter before the pandemic hit. Real spending at fast food restaurants (Line 242) increased even more rapidly, rising by 11.8 percent.

Contrary to the story CNN is pushing, of cash-strapped families being unable to afford restaurant meals, the government data shows a picture of rapid growth, in spite of the impact of the worldwide pandemic. And just to be clear, this is spending after adjusting for the impact of higher prices, so people actually are buying more meals at restaurants than they did before the pandemic.

This first appeared on Dean Baker’s Beat the Press blog.

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC.