close up of male hands with newspaper, muffin and coffee cup on table

While the old adage “if it bleeds, it leads” highlights a bias toward publishing negative news, a research paper from a trio of U.S. Federal Reserve Board staffers finds no such negative bias when it comes to economic news. Rather, the economy reacts more strongly to negative news.

In a new paper, Fed researchers study media coverage of “bad” and “good” unemployment data in three major U.S. newspapers, finding no significant negative bias in economic news. To the extent that previous studies have documented a bias in news coverage of unemployment data, the researchers find that this reflects “asymmetries in the dynamics of unemployment.”

“The asymmetric responsiveness of newspapers’ coverage to positive and negative unemployment shocks is entirely explained by the effects of these shocks on unemployment itself,” the paper said.

Moreover, the researchers found that the economy reacts more strongly to negative news. Specifically, they found that “consumption reacts to bad news, but not to good news [and] bad news is more informative … and affects … expectations more than good news.”

“A bad news shock which unexpectedly increases negativity decreases consumption substantially, especially of durable goods, while a good news shock has essentially no significant effect,” the paper said.

In turn, the paper suggested that “news coverage is more responsive to negative than positive economic developments because bad economic shocks have larger and more persistent effects on economic variables than good shocks.”