When it comes to the reporting of economic statistics, the business media calls the tune and investors often dance. That's why The Business Press Maven raises a glass when business journalists do an insightful job of reporting on economic data, but will splash the contents of that glass onto any biz journalist who writes in low-mentality mode.

Speaking of the sort of dimness in economic data reporting that can lose you money, The Business Press Maven holds a dirty martini at the ready so he can talk about Gross Domestic Products numbers and, as we've seen yet again this past week, their subsequent revisions.

In fact, dance too readily to the media's initial tune on the key benchmark of GDP and, before you can say "revision," you'll be doing your dancing on a subway platform with a beggar's cup.

Here's why: On Tuesday, like clockwork, the Commerce Department revised its estimate of 2005 fourth-quarter growth from a really, really, really lame 1.1% to a just-one-really lame 1.6%. In all seriousness, this is nearly a 50% differential. Not chicken feed.

Though The Business Press Maven will give a merit badge to the first reader who adequately explains how wild guessing does not play a role in these numbers, the Commerce Department said that the revisions were required on this go round because of federal spending, inventories and money blown on equipment and software. Everything, I guess, but a run on gumball machines, funnel cakes and whoopee cushions.

The Business Press Maven is less concerned with the competence of Commerce Department number crunchers, however, than the way the media reports their first slap at numbers as an article of faith.

True, some reporters will dutifully bury a caveat way down low in the article. It goes something like this: "Initial government estimates of economic growth are frequently revised higher." Like, duh.

Even that meager verbal bone is thrown only sometimes, and it's often buried way past a whole storyline woven around the first-draft numbers. And that's not the end of the sort of lawlessness that gives The Business Press Maven a nervous condition. Take the headline... please.

The story based on numbers that won't stand the test of time is often boiled down into an emphatic headline: "GDP Numbers: Economy Turns Really, Really, Really Lame"

When, by all rights, it should read: "GDP Numbers: Economy Turns Really Lame"

That is why, if you use economic data to inform your investment decisions, you need to mentally place the word "initial" into those initial headlines.

And if the headline is too alarmist, force yourself to ignore it.

After all, a difference by a factor of almost 50% is significant for those who are trying to make bankable assumptions on where the economy is headed. One "really" in a lame economy and you can bounce back. Three? Not so easy. You may have to batten down the hatches into recession-proof investments.

And if the reporter doesn't put that caveat about initial numbers being imprecise way up high, along with the legitimizing fill-out of several quick examples, think of these 2005 fourth-quarter numbers yourself.

Or go back in your mind to the fourth-quarter of 2004, for that matter. The economy seemed to have slowed (on only a comparative basis) from a cooking-along 4% to a still robust but less impressive 3.1%. Many headlines and storylines made hay with this apparent downtrend line without making prominent mention that future revisions might render quick conclusions worthless.

Sure enough: in late February of last year, like clockwork, the Commerce Department, in their infinite wisdom, recalculated the numbers. GDP was up 3.8%, all but a rounding error from that red hot 4%.

In the end, there is no Surgeon General's warning about how allocating money based on first-draft reporting of these statistics can be dangerous to your pocketbook. But, as you are reading, stick a Business Press Maven's warning on it yourself.

Equal Opportunity Idiocy

One final bracingly insightful thought before I go. In circumstances like this, The Business Press Maven is often asked by readers if such tendencies in reporting are evidence of a political bias in the media. To this I can only say: I wish.

But shortsightedness, the tendency to act as creatures of habit and the lack of real world business experience is what is at root. GDP reporting has been a problem with different parties in power. Just like, come to think of it, another item that turns The Business Press Maven dark and broody.

When the economy began to improve in the early 1990s, but few jobs were being created, President Clinton was haunted by headlines blaring: "Jobless Recovery"

That was right before job growth started to kick in.

A decade later, with our current president in office and the economy beginning to rebound from the Internet bubble bust, the 9/11 terror attacks and more, but few new jobs showing up on the scene, a very different White House was temporarily haunted by reheated headlines: "Jobless Recovery."

That was right before job growth started to kick in.

In both cases, a simple, preset story line was a draw to reporters. It is important for investors to spot this and always understand why. Here, a good number of reporters are union employees, or, at the very least, have never had experience running their own business. Anyone who has knows that business owners are scared silly to hire in the initial stages of an economic turnaround. Said owners know that, like GDP numbers, economic recoveries might not last the night. So they wait, but not forever.

In any case, The Business Press Maven has a revision to announce: Instead of throwing the contents, he will raise his dirty martini to his readers in a toast to a healthy and profitable week to come. Cheers.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial website twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.