Reclaiming Common Sense

This week we received some positive data on the economy, including February New . Construction, February New Home Sales, the "final" Fourth Quarter Gross Domestic Product numbers, and weekly unemployment claims. The new construction data was considered a "miss" by some observers. The New Home Sales data was a "hit." The GDP data was revised lower, except for the end of the year GDP value which stayed at a stable 2.9%. As usual, the weekly unemployment claims data was virtually ignored.

(March 26)  The week started with the February New Construction data. The non-seasonally adjusted showed weakness in the "starts" data, while showing improvement in units under construction and completions compared to February 2018. Those who covered the data focused on the weakness in starts. "February New Constructions: Completions Up" examined all of the data, not just the "starts" data.

(March 27) The "Tale of Two Data Sets" series regarding the February Jobs Report wrapped up this week with "Record Feb. Jobs for those over the age of 55."  This article was based on the Current Population Survey data which revealed that over 1.2 million non-seasonally adjusted jobs were created during February. This is different from the 20,000 seasonally adjusted workers that were "officially" added to the economy because that number was derived from the Current Employment Statistics. This article continues to discuss how we aren't having a problem with the participation rate because Baby Boomers are retiring. Baby Boomers are reaching retirement age. The record level of jobs occupied by those over the age of 55 prove that many are not retiring. It also discussed the urban legend of record low teen unemployment.

(March 28) Two reports came out at 8:30 AM Eastern Daylight Savings Time this Thursday: The Weekly Unemployment Claims Report and the "First Revision/Final Revision of the Fourth Quarter Gross Domestic Product (GDP.) The unemployment report revealed a second consecutive week with the non-seasonally adjusted first-time unemployment claims under 200,000. It also revealed systematic revisions to the non-seasonally adjusted and seasonally adjusted data. "More Remarkable Unemployment Claims Data" addresses the back to back weeks of fewer than 200,000 first-time claims, the approaching two year anniversary of the seasonally adjusted continuing claims data being under 2 million, and the exceptionally low Insured Unemployment Rate (IUR) of 1.41% this week.

(March 28) The second report released on Thursday was the GDP report for the Fourth Quarter.  The annualized GDP was revised down from 2.6% to 2.2%, while the same quarter GDP was only slightly revised lower from 3.1% to 3.0%. The "final" annual rate of GDP growth for the entire year remained at 2.9%. "Fourth Quarter GDP: Stripping Gears" discussed how we skipped a gear, shifting from 1st (the advance GDP) to 3rd (Final GDP) while skipping the 2nd report (preliminary) of GDP. We had our best fourth quarter for retail sales ever, yet personal consumption expenditures only grew 2.5% quarter to quarter and 2.6% from the fourth quarter of last year.

(March 29) The release of the February New Home Sales data on Friday meant that we finally caught up with the real estate data that was delayed due to the Government Shutdown. "February New Home Sales: Delayed not Denied" details how we set a record average sale price for new home sales for the month of February, saw inventory rise by over 13% from February 2018, and how we saw the highest level of February new home sales since February 2007.

The economy is doing well. It is doing better than it has during the past decade. New home construction is up. New home sales are up. Existing home inventory continues to improve. Unemployment is down. Full-time jobs are at a record level for the month of February. Some age groups are finding full-time jobs easier than other groups. Some age groups are over-participating. Weekly unemployment claims continue to drop. This is not what you are hearing elsewhere because the economy isn't "bleeding." if it doesn't bleed, it doesn't lead.

Next week we receive more jobs data with the release of the ADP Payroll report and the Government Employment Situation Report.

It's the Economy.