Jack Dunn - Reclaiming Common Sense



This week two key pieces of economic data were released: The February Existing Home Sales data and the February New Home Sales data. Last week the January Job Opening and Labor Turnover Survey (JOLTS) for January was released. Data from January does not mean as much as data from February.


(March 20) The JOLTS data is out of date as soon as it is released. The sector data is available for jobs created with the release of the Jobs Report. The JOLTS data is good for measuring quits and separations. The JOLTS data is bad for detailing whether or not the quits or separations are full-time or part-time jobs or seasonal vs permanent jobs.  "January JOLTS, Four Sectors  to Watch" digs into some of the details for the Leisure and Hospitality, Health and Education, the Trade, Transportation and Utilities, and Professional Business Service sectors.


(March 20) Last week the February New Construction data was released, as was "every other report known to man." This week the data was digested in "February New Construction, Slightly Chilly." We need starts and completions in order to generate sales. Neither are great right now. Both are better than they have been over the past eight years. Both are worse than they were 20 to 35 years ago.


(March 22) The existing Home Sales market is vital to our economy. There are more existing homes sold every month tan new homes. People who sell existing homes often buy new homes. People who buy and sell homes require other services and buy other items, such as electronics and appliances, furniture and furnishings, home and garden supplies, and even new cars for their new garages. Sales equals jobs. Jobs equals sales.  "February Existing Home Sales: Inventory Shortage" details how the average existing home sales price hit a new record for February and how units sold are still lagging behind pre-recession levels.


(March 23) They still produce the weekly unemployment claims report. This week they revised all the seasonally adjusted data from 2012 forward. That under 300,000 first-time unemployment claims streak has an asterisk. Live by the seasonally adjusted data, die by the seasonally adjusted data. "What First-time Unemployment Claims Streak"   explains the data and reveals that while we do have under 300,000 SA FTU claims right now, it may be because we have elevated levels of people working part-time jobs or multiple jobs.


(March 23) The new home sales report was released this week. The Average sales price soared while the median sales price dropped. The number of units sold were comparable to what we saw during February of 1983 and February of 1995. "February New Home Ave. Sales Price Soars"  examines the revisions to recent data and projects a lower annual rate of sales than the authors of the report do. Once again the data is better than the past eight years and still in recovery mode. The question here is will we be in recovery for ten or twenty more years? Will the new home inventory relieve some of the existing home inventory pressure?


Jobs "solve" everything. Jobs generate sales. sales generate jobs. More people working full-time jobs mean more people can afford to buy a home. The data for March looks good for the jobs report. Next Friday is the 31st, so no jobs report. That doesn't mean that this column is going to shove off the forecast column for another week. This column will produce the forecast column in advance of the ADP report and the Jobs report.


Last month's Jobs Report reinforced what we already knew: Men are still in a full-time jobs hole, compared to July 2007, the peak of the pre-recession jobs market. It also reinforced the truth that four sectors are consistently lagging pre-recession levels of jobs: Mining and Logging, Construction, IT, and Manufacturing. We also saw near record levels of people working two jobs, especially two part-time jobs. We also know that the seasonal factors used to convert the non-seasonally adjusted private sector workers data to the report seasonally adjusted number was skewed low - meaning that last month's "Best February" data was reported in the mainstream media as just "good" data. What will they do with the seasonal factors this month?


It's the economy.