Reclaiming Common Sense

This week we received data on the Existing Home Sales data for February and on the weekly  unemployment claims data. We also received word that the long awaited Mueller Russian Conspiracy Collusion report was finished. It hasn't been released. It might not ever be released. It has been finished. That is all. Let's talk about a report that nobody has seen for hours on end. Or, we could talk about the data that shows that the economy is still doing fine.

(March 18) There was some discussion that household net worth fell during the fourth quarter of 2018. You would have thought that this was one of the "Four Horsemen of the Economic Collapse of the Trump Economy."  The problem is that this data was released regarding the fourth quarter of 2018 as we are wrapping up the first quarter of 2019. That Christmas "crash" of the stock markets has been replaced with one of the best first quarters for the stock market ever. Net worth is rising. "What is the story behind Household Net Worth story?" examines the data.

(March 20) Selling real estate is all about managed expectations. You do not promise the best inventory to buy during December and January. You don't say that you can find a home in a certain price range if there are non available. All real estate is local. Prices vary on states, city, school district, neighborhood, style of home or condominium, location, condition, and the motivation of the buyer and seller.This column normally produces a real estate forecast article every month.   This month the article "February Real Estate Data Could Spike" promoted the idea that the Government Shutdown most likely "shutdown" the loan approval process and therefore the sales process. This article projected the possibilities for new home starts, units under construction, completions and sales as well as potentially strong data for the February Existing Home Sales data.

(March 21) Sometimes up is down and down is up with regard to government data. This week the non-seasonally adjusted (NSA) first-time unemployment (FTU)  claims and continuing claims (CC) data both fell. We recorded our first week with he NSA FTU claims data under 200,000 claims for this year. Last year this happened a record 21 times. Both the Seasonally Adjusted (SA) FTU claims data and the SA CC data reported  drops this week.  You might not have heard anything about this. We just passed the four year mark on the SA FTU "streak" and we are approaching the two year anniversary of having the SA CC value under 2 million claims. Ho Hum."Unemployment Claims Marching Lower, Again" goes into more details.

(March 21) The February Jobs Report went over like a lead balloon earlier this month. The Current Employment Statistics data reported a gain of a mere 25,000 private sector workers. The same report told of a drop in the seasonally adjusted (SA) CPS unemployment level and an improving SA Workforce Participation Rate. It was a "tale of two data sets." The article "February Men, Women, and Multiple Job Worker Data: Strong" is the fourth installment of the "Tale of Two Data Sets" series. We had a record level of combined full-time (FT) jobs and part-time (PT) jobs for men for the month of February. We had a record February for Women, too. We continue to see men work more full-time jobs than women and women work more part-time jobs than men. We saw men work more dual FT jobs than women and women work more dual PT jobs than men. We continue to see this data ignored elsewhere.

(March 22) The February Existing Home Sales data came in pretty much as projected in the forecast article.  the Article "February Existing Homes: Shutdown Rebound"  details how we set a February Average Sales Price record, how inventory improved February to February, and how the number of units sold came in within expectation. The "annualized" jump in sales caught some pundits off-guard.  The Residential Real Estate "Ice Age" was just a lack of supply. Supply is improving.

What recession? There is some discussion in the media that we are on the brink of a recession. This column has published an article "MSM MAGA Recession Mania Misplaced" that explains that the data that is recorded shows strength while the seasonally adjusted data shows what it wants to show depending on the month. We are approaching the end of the first quarter for 2019. Next month we should be receiving the advance first quarter Gross Domestic Product (GDP) data. This is unlikely. We are set to receive the "preliminary" fourth quarter GDP data this upcoming week. Unless the Bureau of Economic Analysis doubles up the release of the "final" fourth quarter data with the "advance" first quarter data, it will be at least two months until we receive the first quarter GDP data. Two consecutive quarters of contracting GDP is a definition of a recession.

We could see a slower first quarter than we had during the fourth quarter and still be better than first quarter last year.  There are three values for GDP: 1) The headline "annualized" GDP 2) The same quarter GDP 3) the annual GDP. The Annualized GDP is a "what if we grow four four quarters at the same rate that we grew this quarter" rate. Annualized is easier to say. The same quarter GDP received some press this past month because it came in at 3.1% while the end of the year "annual" GD "only" came in at 2.9%. This column produced an article  "Government Shutdown May Not Show Up in Government Data" explaining that the Fourth Quarter GDP data was "mostly in the books" and that anything that was delayed during January might show up in the February data. The recent real estate data indicates that there were some delays in closings for new and existing home sales, due to a slowed or stopped loan approval process. This may have slowed or stopped some retail sales.

This column proposes that while the "Great Recession," a global recession, was mostly created by the Housing Meltdown, or Housing Recession, plus a jobs recession, plus a US Retail Recession, the current economic environment is that the US Economy may prevent the world from going into a recession. We are not in a "retail ice age." We are in a Retail Renaissance. We had a record December Retail month, a Record Annual Retail Sales Year during 2018, and a record January Retail Month. Wages are rising. We have more workers than we have ever had during the month of February. We will see how they spin the GDP report. We will see how they spin the March Jobs report data when it is released. It is all in the data, not the reports on the data.

It's the Economy.