Good Progress - Wrong Forest
This week was a big week in the news. We saw housing data released. We saw Gross Domestic Product data released. It was the first week in office for President Trump. There was a skirmish in the media regarding the size of the crowd at the Inauguration of President Trump and Vice President Mike Pence. A new phrase entered the lexicon in the form of "alternative facts." FACTs in this column are False Assertions Considered to be True. Normally these FACTs are created by using seasonally factors from different seasons and different year and applying them to current data. FACTs can be created by creating new seasonal factors that have never been previously used. Sometimes FACTs are published as "streaks." The Job Creation streak ended this past May - Maybe even January of 2015. The January Jobs Report is being released next week. The rest of the media will be framing it as President Trumps first Jobs Report. That is also a FACT. It is actually President Obama's Final Jobs report because the job collection was done through January 12th. The seasonally adjusted data is what is reported. The non-seasonally adjusted data is what is recorded.
What was reported and what was recorded this week?
(Jan 24) New home sales are a huge stimulant to the economy. New Construction provides jobs for builders, electricians, plumbers, drywall people, carpet companies, painters, landscapers, and retail people. New homes need new or newer furniture, new appliances, new electronics, and new knickknacks. We need to have housing Starts to get housing units under construction. We need units under construction to obtain completions. We need completions for sales. We are recovering from the worst housing recession of the past 40 years. We are in a recovery mode. We have a long way to go to get to an expansion mode. "December New Construction Lackluster" details how the data was strong compared to 2008-2015 and is still historically weak.
(Jan 25) Residential home sales are a driver for the economy as a whole. People who buy homes need other goods and services. The December New Home Construction Data was a little disappointing. The new construction market is still in recovery mode - it may be decades before it is in expansion mode. We need jobs, full-time jobs, for people to qualify for mortgages to purchase these homes. The December Jobs Report was deceptive - and should have been disappointing as well. There are more than one way to examine the sales data, remembering that all real estate is local - down to the neighborhood or condominium association. Units sold are important. The average Sales Price is important. The current year sales data is important as is the rolling year data. So how did we do? The column "December Existing Home Sales Flat" examines the rolling year trends and the current year trends. The existing Home Sales market has not recovered to pre-recession levels.
(Jan 26) The Weekly Unemployment Claims Report was released with little fanfare. The President's First-time Unemployment Streak is no longer referenced in the body of the report. Could it be that they have been reading my articles on their fake news? The non-seasonally adjusted First-time Unemployment Claim number hit a 18 year low for the third week of January. If they had used prior seasonal factors it would have been reported as the highest seasonally adjusted FTU claim number during the past eighteen years,
(Jan 26) How many ways can you say lackluster, flat, unenthusiastic, ho-hum, or unremarkable? December was a lackluster month for new home construction and for existing home sales. The same could be said for the new home sales data. The units sold have been fairly consistently better than prior years, month after month. The problem is that where the media is saying that it is the "best in almost a decade" forget that it is worse than we saw during the 1980s, 1990s, and early 2000s. The housing market is getting a "D" where it used to get an "F."Remember that all real estate is local, community, school district, neighborhood or condominium complex, as you read "Non-Plus December New Home Sales Data". The national picture is a 30,000 foot level view.
(Jan 27) Every month it is the same story: Media hypes upcoming jobs report. ADP jobs report is released to temper the potential news. The jobs report doesn't match the ADP number. The jobs number is a "Goldilocks" number, not too hot, not too cool. Not right. The seasonal FACTors used to convert the non-seasonally adjusted data to the reported seasonally adjusted data have been skewed to get that Goldilocks number. The media reports on the report not on the data.Data revisions and improper seasonal factors are giving the wrong picture of the economy. "Jarring January Jobs Report Forecast" explains how we will see NSA Job loss, NSA worker Loss, a spike in unemployment, a drop in participation and how the authors of the report will manipulate the data. It is possible that they will skew the data low to show a "job loss" in the Private Sector number used for Obama's job streak thinking that this is President Trump's first report and not President Obama's final report.
We have only 741,000 more full-time jobs right now, as of the December Jobs Report, than we had at the peak of the pre-recession Jobs Market during July 2007. We could record a loss of 500,000 or 1,000,000 full-time jobs in the January Jobs report. Will we end President Obama's term in office with fewer full-time jobs than we had nine and a half years ago? Alternate FACTs exist. The Jobs report will be released next Friday. If we are It is possible that it will get a commentary as President Trump's first report. That coverage will end by the end of the day. This column will spend the following week analyzing the data.This one is all on President Obama. He built it.
It's the economy.
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