Reclaiming Common Sense

It is difficult for the impacts of the Government Shutdown on the Economy when the Government data is not released in a timely manner. Normally we receive the new construction data first, followed by the existing home sales data and then the new home sales data. This week we received the January existing home sales data, while we are still stuck in November for the new construction and new home sales data.

There were only two reports released this week that this column covers: The monthly existing home sales data and the weekly unemployment claims data.

(Feb. 19) This column produces a monthly real estate forecast article for the New Home Construction data, the New Home Sales data, and the Existing Home Sales data.  It was thought that we would see existing home inventory improve from January to January and from December to January. It was thought that we would set a new January record Average Sales Price. It was thought that the units sold would improve with improving inventory levels. "January Existing Home Forecast: Surprise" goes into the details.

(Feb. 21)  We still receive weekly unemployment claims data on Thursdays at 8:30 AM Eastern Time, when we do not have a holiday. This week the data was remarkable. "February Unemployment Claims Data Improves Again" explains how we had the fewest non-seasonally adjusted (NSA) first-time unemployment (FTU) claims for the third week of of February.We had he lowest continuing claims data for the second week of February since February 10, 1973. We also had one the lowest Insured Unemployment Rate (IUR) for the second week of February. Remember that we have 86.7 million more covered insured now than we had during the second week of February 1973.

(Feb. 21) The January Existing Home sales data was better than reported. If you read the "forecast" article then you may remember that there was the possibility for a drop in existing home sales to a level between 260,000 and 278,000 non-seasonally adjusted (NSA) units.  It was thought that the improved inventory could boost sales over 313,000. The units sold was going to be unpredictable. Units sold disappointed with only 285,000 condominiums and single family homes sold. This was the headline elsewhere. "January Existing Home Sales Record Average Sales Price Ignored" reported on the sales price, the inventory, and the units sold. Inventory improved month to month and January to January.

The January existing home sales report was released in a timely manner because the data comes from the REALTORS and not the government. The thing that is being forgotten is that the loan approval process goes through the government and was impacted by the shutdown.  If loans are not approved then the sales do not close. If they do not close then they are not recorded as sales. If they are not recorded as sales then they are not included in the sales numbers for January. Did these sales get delayed a month? Will we have a huge surge next month that will catch reporters off-guard? Could it boost February sales by 30,000 units? Time will tell.

It's the Economy.

PS. The Weekly Continuing Claims data is a different data set than the Current Population Survey (CPS)  for Unemployment and Jobs. The CPS jobs data is different from the Current Employment Statistics (CES) worker and wages data. The CES data is a different data set than the JOLTS data.  It is not proper, statistically speaking, to compare the job openings data with the CPS U-3 unemployment data.