MH60S

Monday, July 27, 2009

11% Increase in New Home Sales? 11% above what?

The "How to Lie with Statistics" moment of the day - after a day spent listening to the media hype over an 11% increase in new home sales - I checked on line to see if any real economist had taken on that magical 11% number being touted as a "sign" of economic turnaround. And I found it here:
“An 11% month-over-month increase looks good, but it’s an 11% increase over a very small number,” said Paul Ashworth, Senior US Economist at Capital Economics in Toronto. “It’s the beginning of a new phase, but I’m not sure it’s an exciting new phase.”

Ashworth said sales might have bottomed, but the recovery will be slow.
More from the "dismal science" here, including this:
The news sounds better than it looks … despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982
I don't think I'll be cracking open the champagne just quite yet.

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