Dow Jones has a unique way to measure the economic sentiment of America at a given moment – it measures how stories on the economy are being reported in the nation’s newspapers – and it says it hasn’t come up with a positive score since November 2007.
The Dow Jones Economic Sentiment Indicator uses a 100-point scale, with a score of 50 indicating an even amount of negative and positive sentiment. Anything above that indicates reflected optimism making it into the news, and anything below 50 indicates negative sentiment.
The good news, at least, is that the score is unchanged from April – the May bottom line is 46.6.
“The story from the ESI is the same: press perceptions of the economy remain steady at an unspectacular level,” said Dow Jones Newswires “Money Talks” columnist Alen Mattich.
There is another snippet of good news, actually. Stories that touched on the economy included reporting on the Dominique Strauss-Kahn sex scandal, and they were negative. Dow Jones says that if you take them out of the equation, the score would actually increase to 47.5, better than April but still not quite up to par, much less positive territory.
The ESI is based on reporting in 15 major daily newspapers. DJ says that it back-tested the program used to generate the report to 1990, and believes it may have predictive value going forward.