Reclaiming Common Sense

The Economy is Surging and the Mainstream Media Can't Deal with It.

This column produces numerous articles during the course of a week, month, or year. It has been essential to publish weekly, monthly, and annual review columns in order to keep the attention on the data that is being misrepresented and under-reported elsewhere. It often seems that this column is still analyzing the data while others are moving on to the political stories of the day. Jobs Report Friday is often Jobs Report 8:30. Retail sales Report Day may receive a combined 15 minutes of discussion. Housing starts, housing sales, new or existing are relegated to "scroll news." "If it bleeds, it leads" has now been paired with "Good News is No News" instead of "no News is Good News." We had some very good news this week. Did you blink and miss it?

(April 18) The united States is a consumption based economy.Retail sales are vital to the economic health. The "must see" television starts with Black Friday and ends on New Year's Day.. We recently received the Monthly Advance Retail Trade Survey, also known as the Monthly and Annual Retail Trade Survey, or MARTS, for the month of March , The annual growth rate of 3.94% is the highest since March 2013.The  article "March Retail Strong, Revisions Mixed" reveals that the February data was massively revised downward, especially for the automotive sector, that every sector had sales higher during March than they had during February of this year, that four sectors had sales lower than March of 2016, and that two sectors still are not at March 2007 levels.

(April 19) Real estate sales have a multiplier effect on the economy. New homes require construction jobs, appliance sales, home and garden sales, movers, lenders, appraisers, loan officers, salespeople, and other service providers and miscellaneous sales. The "Great Recession" was more than a Gross Domestic Product (GDP) Recession. The Great Recession was a Housing Recession coupled with a Jobs Recession, coupled with a Retail Recession that was recorded as a GDP recession . When the new construction market hit rock bottom during 2010 we were seeing activity that had not been seen since 1975. We have been digging and building our way out of that hole since 2010. The March New Construction data released this week was good news - and crickets. "March New Construction  Improves" details how the "Starts" data is the best more the month of March since 2007, the completions data is the best since 2008, and the under construction data is the fifth best March number since 1975. We had more homes under construction between 2004-2007. 

(April 19) Last week was Holy Week. There was data that fell through the cracks because of Maundy Thursday and Good Friday. The Consumer Price Index (CPI) data was released with very little fanfare. This column has been commenting on Medical Cost Inflation and Shelter Cost Inflation for many, many months. March was more of the same. The "energy savings" that we were seeing during 2015 and 2016 are gone to higher taxes and higher energy and shelter costs. These "savings" were supposed to stimulate the economy. The media forgot that the taxes were acting as a depressant. The Ultimate Rum and Coke with more rum than Coke. "March Shelter, Energy and Medical Inflation" details how if you spent $4000 on a basket of goods last March that you needed an additional $99 dollars to buy the same items this past month.

(April 20) They still release weekly unemployment claims data on Thursday. We had fewer first-time claims and continuing claims for this week of the year than we have seen for either category since April of 2000. "Unemployment Claims Levels Remain Low" details how some of this is due to a near historic low level of participation, some is due to the recent elevated levels of people working two jobs, and the elevation of part-time job levels since July 2007. Will they report when the seasonally adjusted first-time claim level drops below 200,000? Will the authors of the report allow that to happen?

(April 21) The housing crisis "caused" the Great Recession. There were many causes - Hurricane Katrina, Rita and Wilma and the ensuing gasoline spikes in prices, as well as people borrowing more money for homes than they could really afford. The "death knell" was the Ike spike of gasoline prices during 2012, after Hurricane Ike, during a weakening economy. Ike was economic ice storm that came after many economic ice storms. People have considerable wealth stored in their houses. When property values dropped homeowners "could not move." Sales dropped. Inventory soared. Prices dropped more. People filed for bankruptcy. Property values fell even more. The market was bifurcated between the non-distressed sale market and the distressed sale market.The March data revealed the highest ever average sales price for the month of March, as well as a top 5 month of March units sold number. Inventory is still near an 18 year low. We have sold over 5.5 million units during the past 12 months - still lower than the 7 million pace at the peak of the market - faster  than March 2003, Slower than March 2004. We saw "Strong, Solid March  Existing Home Data." The media shrugged it off.

Are we receiving too much good news? Is good news no news? We live in a non-seasonally adjusted world. It is time to smell the coffee, buy some coffee, drink some coffee, and repeat.Yesterday's column asked what if we are on the road to expansion and nobody is looking at the map or looking at the wrong map or maps?

It's the economy.