In mid-February, Wall Street was celebrating the stock market reaching record highs. But the stock market has since lost roughly 20 percent of its value in the wake of the coronavirus, and the broader economy is in freefall as well. A record number of Americans have filed for unemployment benefits, and the March jobs report found the economy had lost 700,000 jobs — the first time that number has declined in a decade.
But even though large swaths of the economy have shuttered with extraordinary speed, this economic downturn is likely to hit some people and places much harder than others. Those disparate effects, in turn, raise a question that is critical for politics as well as economics: In a country as large and diverse as the U.S., how do citizens know whether the economy is doing better or worse?
One obvious source of information is the news media. In fact, some political scientists have found that negative news coverage of the economy can shape public opinion, especially in an election year. Marc Hetherington, for instance, found that media coverage in the run-up to the 1992 presidential election was more negative than the economy warranted and cost incumbent President George H.W. Bush support. That could be particularly telling now, considering this is all happening just months ahead of a presidential election, and a strong economy has historically boosted the incumbent president’s chances of winning reelection.
But in a 2017 “Research & Politics” article, Eunji Kim, Soojong Kim and I found that the news media’s ability to influence Americans’ perceptions of the economy may be overstated. Our analysis found that major media outlets’ coverage of the economy is much more likely to lag public perceptions than to lead them. That means that the media coverage of an economic recession, like the one we seem to be headed toward, isn’t independently reshaping how Americans think the economy is doing. Instead, we found that media coverage often follows public opinion.
We used nearly 40 years of data from the University of Michigan’s surveys of consumers, a long-running survey that asks Americans their views of the economy, to create a monthly index of Americans’ level of concern about the economy.1 We then compared that index to a measure of how 24 different media outlets covered the economy during that same time period, including big national newspapers like The New York Times and The Washington Post as well as regional papers like the Houston Chronicle.2 Systematically measuring media outlets’ coverage in nearly half a million newspaper articles and television transcripts proved a bit more challenging. But similar to our approach with the economic survey data, we created an index, this time using words associated with positive or negative economies — words like “bear,” “drop,” “jobless,” and “layoff,” as well as “bull,” “growth,” and “invest”tracks real-world economic indicators closely.">3 — to score the tone of economic stories published by these outlets.
And if we drill down into one of the most prominent media outlets we analyzed, The New York Times, we find no indication that media coverage is shaping public opinion. A telltale sign of media influence would have been if the tone of the Times’s economic coverage shifted before public perception does. But as you can see in the chart below, that didn’t really happen. Instead, the public’s perceptions of the economy more often seemed to lead news coverage rather than lag behind it. For instance, during key moments such as in the run-up to the Great Recession in 2008, the public grew more pessimistic well before the Times’s tone shifted.
In fact, this was the case across the 24 media outlets we analyzed. There were some outlets for which we found that the tone of media coverage consistently led public perceptions of the economy, but overall, we found no strong evidence that media coverage pushed Americans as a whole to perceive the economy in one way or the other.
Given how much attention politicians devote to the tone of media coverage, these results may seem surprising. But we’re actually not the only researchers to conclude that public perceptions aren’t heavily influenced by how the media frames the economy. H. Brandon Haller and Helmut Norpoth, for instance, found that citizens’ perceptions of the economy didn’t vary much based on their news consumption habits.
Still, other studies find evidence that the influence can run in both directions, with the tone of media coverage sometimes anticipating public perceptions. For example, Stuart Soroka, Dominik Stecula and Christopher Wlezien found that public perceptions can anticipate media coverage, but also that media coverage can actually lead public perceptions of how the economy has performed but not perceptions of how it will perform. After examining the tone of economic coverage in the four highest-circulation national newspapers, though, Amber Boydstun, Benjamin Highton, and Suzanna Linn conclude that media coverage can predict how Americans view the economy even after accounting for the state of the economy itself.
On two key points, then, academic research has been consistent: Public perceptions of the economy can get out ahead of media coverage, and public perceptions are also closely connected to actual economic conditions. This suggests that there are critical limits to the media’s influence on public perceptions, which is consistent with other research that shows the impact of elite opinion is often overstated.
In other words, when the economy shifts directions, the news media’s capacity to reshape public perceptions of the economy is limited at best. It’s easy to pick up a newspaper and assume that its writers and editors can shape public opinion, but that doesn’t seem to be true of the economy. Rather, the public reacts to real-world economic conditions, not media spin.