Fox & Friends' Camerota falsely claimed Summers cited Google -- but not GDP -- as sign of economic recovery

During the July 20 edition of Fox News' Fox & Friends, co-host Alisyn Camerota falsely claimed that White House chief economic adviser Larry Summers did not cite gross domestic product (GDP) as an economic indicator during a recent speech in which he argued that the economy is improving, and instead relied on "the search terms -- the words that people are using on Google." In fact, in the July 17 speech before the Peterson Institute to which Camerota referred, Summers not only mentioned that "the rate of searches for 'economic depression' on Google" is "back to normal baseline levels," but also cited several economic indicators that the economy is recovering, including that "[t]he pace of GDP contraction is slowing, and many private forecasters expect to see positive growth in the second half of the year."

Discussing Summers' comments, co-host Brian Kilmeade asked, "[W]hat indications does he use to find out if this economy is turning around and if confidence is growing?" Kilmeade subsequently asked, "GDP?" and Camerota replied, "No, no, no." After co-host Steve Doocy asked, "Psychic Friends Network?" Camerota claimed, "Close. It is the search terms -- the words that people are using on Google -- and fewer people this month have searched the term 'economic depression' than they did six months ago."

But in addition to citing "the rate of searches for 'economic depression' on Google" during his Peterson Institute speech, Summers explicitly cited GDP as one signal that "we have walked some substantial distance back from the abyss." Summers also cited the following indicators:

SUMMERS: A majority of businesses now report that they expect improved market conditions, the opposite of six months ago. Consumer sentiment has also begun to improve.

Those options that were saying one in six of a Dow under 5,000 this year are now saying it's closer to one in a thousand. The implied 10-year default rate on investment-grade bonds has fallen by a third. Municipals issue bonds in much more normal ways.

Earlier in the speech, Summers had cited many of the same indicators as evidence that "[t]he economy was in freefall at the start of the year, with no apparent limit on how much worse things could get." After referring to financial markets, GDP, municipal bond issues and "traditional measures of consumer and business confidence," he added: "The anxiety could be measured in one -- in one of many ways. Take one modern indicator: Google searches for the term 'economic depression' were up fourfold from their baseline level."

From Summers' July 17 speech at the Peterson Institute for International Economics:

SUMMERS; Begin last January. Though only a half a year ago, it's easy to forget how far we have traveled. When President Obama assumed office, he faced the most serious economic and financial crisis of any president since Franklin Roosevelt. Typical of the prevailing sentiment was Paul Krugman's warning in January of 2009, "Let's not mince words: This looks an awful lot like the beginning of a second Great Depression."

The economy was in freefall at the start of the year, with no apparent limit on how much worse things could get. Over the three months ending in February, the economy lost 2.1 million jobs, the largest three-month decline by a factor of two since the Second World War. GDP was declining over a six-month period at an annual rate of close to 6 percent. And even before any policy changes, the budget deficit was projected in 2009 to be well in excess of a trillion dollars.

Financial markets suggested significant risks of implosion. We looked at rather fat-tail probabilities, as calculated from options. They suggested a better than one in six chance that the Dow would fall below 5,000 at some point during 2009. Markets were expecting 38 percent of investment-grade corporate bonds to default within 10 years.

Municipalities faced tremendous difficulties issuing new bonds, to the point where muni bond rates, which are supposed to be below Treasury rates because of the tax benefits, soared to nearly double Treasury yields. Fear was widespread and confidence was scarce. Traditional measures of consumer and business confidence fell to low levels not seen in decades.

The anxiety could be measured in one -- in one of many ways. Take one modern indicator: Google searches for the term "economic depression" were up fourfold from their baseline level.

And something similar was true of mainstream media references to economic depression. That is what the nation faced just six months ago.

[...]

Where are we today? If we were at the brink of catastrophe at the beginning of the year, we have walked some substantial distance back from the abyss. A majority of businesses now report that they expect improved market conditions, the opposite of six months ago. Consumer sentiment has also begun to improve.

Those options that were saying one in six of a Dow under 5,000 this year are now saying it's closer to one in a thousand. The implied 10-year default rate on investment-grade bonds has fallen by a third. Municipals issue bonds in much more normal ways. The pace of GDP contraction is slowing, and many private forecasters expect to see positive growth in the second half of the year. And yes, if you look at the rate of searches for "economic depression" on Google, or you look in the mainstream media, it's back to normal baseline levels.

From the July 20 edition of Fox News' Fox & Friends:

KILMEADE: Larry Summers has got a very important job, and he is the one who's got to tell us how the economy is going, and we know that he works very hard, and, oftentimes, we've seen -- he's been caught on camera nodding off. But --

CAMEROTA: He works so hard that he has to nap during meetings, but --

KILMEADE: But what indications does he use to find out if this economy is turning around and if confidence is growing.

CAMEROTA: The unemployment rate? No. That's not necessarily what he's using. The debt --

KILMEADE: GDP?

CAMEROTA: No, no, no. Keep guessing.

DOOCY: Psychic Friends Network?

CAMEROTA: Close. It is the search terms -- the words that people are using on Google -- and fewer people this month have searched the term "economic depression" than they did six months ago.

KILMEADE: So what does that mean?

CAMEROTA: It means that fewer people think that we are in an economic depression, and that's a sign of increasing consumer confidence.

KILMEADE: Is that the silver lining? That's scary.

CAMEROTA: Yes, that's what he says. This is what Larry Summers says is the indicator that the economy is on the uptick.

DOOCY: I'm looking at Google right now. I'm looking at the hot trends for this hour. The Orange County movie, ESPY winners --

CAMEROTA: See?

DOOCY: -- Chronicles of Riddick.

CAMEROTA: See? Economy is doing well.

DOOCY: Yeah, it doesn't even talk about it. I guess we're OK. Happy days are here again.