U.S. data: some see hype, others feel pain

EULESS, Texas (Reuters) - News that the economy did not shrink as fast as economists expected comes as no surprise to north Texas mall manager Tim Stinneford, who thinks the media is fanning the flames of panic.

"There is a frenzy going on. Yes, the economy is tough right now but people don't need to panic," said Stinneford, 55, as he dropped off laundry at a dry cleaning store in Euless, a town near Fort Worth. "Everything now is blown up."

The U.S. economy shrank at its briskest pace in nearly 27 years in the fourth quarter of 2008, government data showed on Friday, sinking deeper into recession as consumers and business cut spending.

The Commerce Department said gross domestic product, the measure of goods and services output within U.S. borders, fell at a 3.8 percent annual rate -- not nearly as fast as the 5.4 percent that a Reuters poll of economists had forecast but still a jarring decline.

In Phoenix, former real estate broker Bill Austin, 53, was having none of it. He said he saw political spin in all of the hype about the economy.

"Wow! They lied to us, all those politicians! I believe it was Obama who said this is the worst economy since the Great Depression, and truly it isn't. It's only the worst since 1982," said Austin.

Stinneford said the constant doom and gloom in print and on the Internet, television and radio was adding to the growing sense of alarm and despondency.

He said his mother had told him that, during the last big contraction 27 years ago, she did not realize how bad it was with just three channels on TV and no Internet.

"She said 'I got my Wall Street Journal every day, I did my own investments and I realized things we're getting a little rocky,'" Stinneford said. "But it was not being shouted at you from all four quarters all day long. And she said 'We made it through fine.'"

Nick Somani, 70, the owner of the dry-cleaning shop where Stinneford was dropping off his clothes, agreed.

"The media is slowing things down," he said as the data was being discussed on the TV set in his shop. His business was down about 5 percent, a situation he blamed on the "negative news" that he said was affecting people's spending behavior.

BUCKLE UP

Friday's numbers capped a dismal week. Data on Tuesday showed U.S. consumer confidence plumbed historic lows in January, while home prices fell at a record pace in November.

Like many Americans, 57-year-old Jeff Wolfer of Kansas City, Kansas said the steady stream of bad news only reinforced his commitment to keeping his living expenses lean for what he expects to be an extended downturn.

"Fortunately my car is paid off and I'm somewhat healthy," said Wolfer, who works as a video store clerk for minimum wage. "It would sure be nice to have a better job or a better economy to look for a better job. But I think it will get worse before it gets better."

Others said they had experienced first-hand the pain that lay behind the numbers.

Eric Christopher, 24, said he and his fiance lost their home in Kalamazoo, Missouri, in a foreclosure after they could not keep up with the mortgage payments. They have been forced to move to Atlanta and live with his fiance's mother.

A few years back, Christopher was working as a class-A truck driver and earning up to $800 a week. Now he works in a grocery store and his most recent weekly pay check was $270.

"It's hard to be optimistic because of what's happened," Christopher said.

Others said they were hopeful the economy was about to turn a crucial corner and expressed confidence in new President Barack Obama to get things rolling again through a stimulus package now with Congress that could hit nearly $900 billion.

"I'm not concerned with things getting too much worse," said Joe Policastro, 23, a personal trainer and pre-med student at the University of Cincinnati. "I think Barack Obama is a very intelligent person who is going to do the right things to help us get out of the economic mess we're in."

Back in Texas, Stinneford said it all depends on how you look at things.

"We are at 7 percent unemployment but that means that 93 percent of the people have a job," he said.

(Additional reporting by Andrea Hopkins in Cincinnati, Carey Gillam in Kansas City, Tim Gaynor in Phoenix and Matthew Bigg in Atlanta; Editing by John O'Callaghan)