The business press worships at the altar of seasonally adjusted data. Most journalists covering the economy don't even bother looking at raw, not seasonally adjusted data, which in layman's terms is best understood as "what actually happened." As I have shown for nearly a decade, this is often a big mistake.
On the rare occasions when reporters take the initiative to look at the raw data, they usually ignor it, or fail to grasp its meaning. A perfect example of that phenomenon occurred today at Bloomberg News. The business press is blindly accepting a reported 10.5 percent drop in existing home sales as evidence of all kinds of problems, including — supposedly, but not really — a regulation-driven extension of closing time frames. Though Bloomberg's Victoria Stilwell was astute enough to look at the underlying data, unlike her fellow reporters at the Associated Press and Reuters, she completely ignored how doing so blew up the narrative.
Reuters and reporter Lucia Mutikani went way overboard today in reacting to today's residential construction news from the Census Bureau.
Mutikani's headline contended that today's "housing data signals economic strength," while a section title claimed that there are "strong housing fundamentals." That can only possibly be true if one believes the world began in 2007.
One hesitates to give attention to Jesse A. Myerson. But it's probably worth it, if for no other reason to contend that many of his beliefs are likely shared by the mindless lemmings disguised as "journalists" who wildly cheered on Saturday when an obviously orchestrated "climate change" agreement designed ultimately to redistribute massive amounts of wealth from developed to underdeveloped countries — which would virtually guarantee that they will stay undeveloped — was announced in Paris.
Almost two years ago, Myerson, whose experience includes "the Media and Labor Outreach committees at Occupy Wall Street," identified of "Five Economic Reforms Millennials Should Be Fighting For" in a Rolling Stone column. A week ago at The Nation, he vacuously attempted to elaborate on one of those five ideas, namely: "Let’s get rid of private housing."
As yours truly noted in several posts at my home blog on Wednesday and at NewsBusters on Friday and Saturday, the torrent of pre-Thanksgiving "getaway day" economic data was largely disappointing.
That didn't stop the Associated Press's Chris Rugaber from pushing the "All is well" meme late Wednesday afternoon, declaring, contrary to what anyone's eyes could see, that "the fundamentals of the U.S. economy remain solid," that "Consumers appear relatively confident in the economy," and that "Americans are unleashing pent-up demand for big-ticket items such as homes and cars."
On Wednesday, the Associated Press's Josh Boak added to the wire service's collection of weak "Getaway Day" business journalism by declaring that new-home sales "recovered in October."
No they didn't. The seasonally adjusted annual rate of 495,000 units reported by the Census Bureau was the fourth-lowest monthly level seen this year, even well below the 521,000 and 545,000 reported in the supposedly unprecedentedly awful winter months of January and February, respectively. Boak also claimed that "Americans recovered much of their appetite for owning new homes this year," even though current levels are at best about 70 percent of what one would expect in a pre-"new normal" healthy market.
Gosh, this gets tiresome.
Once again, with one noteworthy exception, the business press's virtually blind acceptance of seasonally adjusted economic data, and its accompanying refusal to look at the underlying raw data, led it to paint a deceptive picture of an important element of the economy. This time, it was existing home sales for October. The seasonally adjusted annual rate for October reported by the National Association of Realtors this morning is almost 4 percent higher than seen in October 2014. The trouble is, the raw sales data show an increase of less than 1 percent.
Here's what should be an easy question: With data which has already been seasonally adjusted, what's more important — a) the fact that an index is a) up by 3 percent in the past year or b) the fact that it has fallen 5 percent in the past four months?
The correct answer is obviously b) — unless you're a writer for the Associated Press whose mission is to convince readers that the housing market, despite clear evidence to the contrary, is just fine. Therefore, the AP's Josh Boak chose a):
To err is human, but some errors are more obvious than others.
One pretty obvious error occurred Tuesday at the Associated Press. It involved veteran economics reporter Christopher Rugaber, who somehow assumed that the August increase in home prices recorded in a well-known index published on Tuesday primarily occurred because of "solid sales." The problem is that seasonally adjusted existing home sales declined sharply in August.
Today saw yet another "unexpected" disappointing development in the U.S. economy. The Census Bureau reported that seasonally adjusted sales of new homes, an area thought to be a bright spot, declined sharply in September to an annual rate 468,000 from 529,000 in August. The bureau also revised July and August significantly downward.
As bad as the as the adjusted numbers were, the raw data was even worse. Despite all of this, and despite the fact that the pace of new-home sales is still only about two-thirds of what it used to tell readers would be a "normal" or "healthy" level, the Associated Press's Josh Boak, apparently taking a double shot from today's good-news koolaid delivery, tried to pawn off today's result as a one-off interruption of what has otherwise been a year where "zeal for newly built homes took off."
Hillary Clinton was in Alabama a few days ago. As she has in the past at least two other times when south of the Mason-Dixon line, she decided that she could drop the letter "g" from several of her "i-n-g" words while affecting a sort-of Southern accent.
This time she was in Alabama. Mrs. Clinton cut the "g" from the at least the following words she has no trouble fully pronouncing when she's in other areas of the country: having ("havin'"), saying ("sayin'"), working ("workin'") and saving ("savin'"). She also bizarrely put the accent in the words "recession" and "depression" on the first syllable. No one in the establishment press appears to care about this apparent region-based condescension, though to be fair the video involved (but no related story I could find covering what she said in it) is from the Associated Press.
August's seasonally adjusted Pending Home Sales Index value contained in the related press release from the National Association of Realtors was the lowest in the past five months, and 2 percent below April's level.
Disclosing the size of the recent slump apparently wasn't considered important at the Associated Press, aka the Administration's Press. What was news at AP, whose Josh Boak essentially copied NAR's release and added standard boilerplate about job growth instead of engaging in informative journalism, is that the index is up by over 6 percent from a year ago, even though that increase ended several months ago.
Thursday morning at the Associated Press, aka the Administration's Press, Christopher Rugaber opened his coverage of the Census Bureau's New Residential Sales report as follows: "Buoyed by steady job gains and low mortgage rates, Americans purchased new homes in August at the fastest pace in more than seven years."
Sorry, pal, it was the "fastest pace" in — wow — three months. The bureau's not seasonally adjusted home sales table told us that: