Lord have mercy, these people are looking anywhere and everywhere to turn an economic improvement molehill into something that sort of looks like a mountain.
Today, the headline to Derek Kravitz’s report at the Associated Press (“Rise in home construction suggests a turnaround”) reasonably reflected the underlying reality reported by the Census Bureau, but his first six paragraphs most definitely did not:
The depressed housing market has held the economy back for four years.
No longer.
Home construction has finally begun a gradual comeback and should add to the nation’s economic growth in 2011, a turning point in the recovery from the Great Recession.
The main reason appears to be a positive consequence of the weak economy: Apartments are being built almost twice as fast as two years ago. Renting is the only option for many people who have lost their jobs, their homes or both.
Builders in November broke ground on homes – houses and apartments alike – at an annual rate of 685,000, the government said Tuesday. That was a 9.3 percent jump from October and the fastest pace since April 2010.
The numbers show how far the housing industry has come and still has to go …
Well Derek, let me present all of the numbers, and we’ll let readers decide “how far the housing industry has come and still has to go”:
- Housing starts, seasonally adjusted annual rate: 685,000. Best since April 2010. Not bad, except for the fact that in the almost 49 years of recordkeeping before 2008, no other month’s reported annualized starts came in below 798,000 — and a typical value during that 49-year period was way, way over 1 million.
- Housing starts, raw data (i.e., not seasonally adjusted): 51,800, consisting of 32,300 single-family homes and 19,500 units in multi-unit structures. The single-family home number is the lowest value since February 2011, and was slightly lower than November 2010. The multi-unit number is vastly improved, but still less than it was four years ago, and multi-unit dwellings never experienced the bubble that was seen in single-family homes.
- Building permits, seasonally adjusted annual rate: 681,000, and the best number since March 2010. Wait a minute — Does anyone remember March 2010 being a great month for the economy? Didn’t think so. This month’s permits number is a nice improvement, and it beats things going in the other directions, but building permits aren’t necessarily indicators that building will occur any time soon, and the value was also typically miles over 1,000,000 during the 48 years before 2008.
- Building permits, not seasonally adjusted: 50,400. About 20%-25% better than November 2008, 2009, and 2010, but far below all other previous Novembers.
That’s a far more healthy and ultimately more beneficial approach than looking anywhere and everywhere for every possible sign that things are only going to get worse, and broadcasting the word of impending doom to the general public around the clock for 37 continuous months.
Consider the following facts:
(1) There’s an extremely important psychological component to the health any market or economy.
(2) In the context of any market or economy, prevailing feelings of optimism or pessimism are actually determinants.
It would have been helpful to the nation if republicans had devoted at least a little time and energy to building confidence the future of national economy. They have contributed precisely nothing to that cause, and 100% or their time and energy to doing the exact opposite.
Anyone paying even a modicum attention has to realize that helping to build an economic recovery for the majority of the American population really isn’t among their highest priorities. So long as they’re not in the driver’s seat themselves, that’s something to be prevented.
Confidence must be reality-based or it results in a bubble, like our past experience with what was called irrational optimism.
When some headlines spew optimism, we have to look past the headlines.
Reuters: “Jump in U.S. housing starts points to recovery.”
BUT If we use non-seasonally adjusted data (aka, raw data not tampered with), we find that 1 unit housing starts actually FELL -11.25% in November.
BUT Multifamily dwelling starts were up, somewhat.
See this chart.
WHY?
Because the Obama investment tax credit for multifamily ends 12/31/11 when the FHA’s 223f program goes back to old rules.
Once again, the Federal government is skewing the recovery by incentivizing one sector of the economy over the others.
(For other examples see charts of auto sales that include ”Cash-For-Clunkers,” or employment charts that include the US Census hiring bump.)
Cash-For Clunkers:
http://friskaliberal.files.wordpress.com/2010/06/cash-for-clunkers-graph.jpg?w=450&h=307
CENSUS:
http://static.seekingalpha.com/uploads/2010/9/23/98115-128525969225937-John-Lounsbury.jpg
Sorry, Greg. Only Reid and Obama hold keys to the WH supply of fairy dust, and they don’t share…
Let’s look at the housing starts picture, shall we?
uh errrrr… do call me unimpressed. What we have is what we’ve been seeing all along… a flat, lackluster recovery. This after upping the federal debt and taxpayer burden by trillions. It’s not only considerably worse than Carter’s economy, it’s staying flat considerably longer than Carter’s economy.
Oh wait… we had a different kind of POTUS then….
And speaking of fairy dust, the Nat’l Association of Realtors got caught with their pants down by CoreLogic for “overstating” the happy face on home sales for several years.
Due to the way the NAR chooses to assemble it’s data (samples from various MLS and census data, for example), there’s been a lot of double counting going on… But hey, made some people put on their happy face by looking at the bogus numbers.
Needless to say, the NAR has had to revise it’s numbers down… basically saying what was really an ugly housing market was even worse than we thought.
Of course the only hitch INRE the hope of a “rebound” due to “pent-up demand” is that the unemployment in the mid-80s was significantly improving, and the environment for business growth was encouraged and healthy. ooops…
Trying to avoid reality in an effort to effect false “confidence” is a highly offensive suggestion. Folks can’t effectively plan their financial lives and decisions when they are sprinkled with fairy dust. Nor can actual corrections be made if one doesn’t have a grip on the truth. And some of that entails who one may want to elect in Congress or the WH.
@MataHarley:
Your chart did a better job of showing my point, that Obama had tried to skew the appearance of a recovery.
The blue line is the single family dwelling.
The red line is the multiple-family dwelling.
Obama’s investment tax credit for multifamily ends 12/31/11 when the FHA’s 223f program goes back to old rules.
Then we will see that red line drop, just like after the US Census jobs bump ended.
And just like after the cash-for-clunkers bump ended.
I just wonder what surprise Obama has planned to pull the wool over the eyes of dopes just before the election.
(I hope and pray we have time to get the true picture out there in time.)
exact’a’mundo, Ms. Nan G.
More bad news for the Pollyannas among us.
The federal government has been fudging the numbers on how anemic the economy is.
On October 27, 2011, the federal government said third quarter growth — July, August and September — was 2.5%.
On November 22, 2011, the official report was trimmed to 2%.
December 22, 2011, was another downgrade of the official number to 1.8%.
That means our gov’t made a 39% higher number to make things LOOK GOOD before they were forced by the reality that anyone with access to the facts would realize how far off they were.
Only at the last moment did Obama’s economic team come clean.
In private enterprise an estimator who was often that far off would find him/herself looking for work.
When we hear a 4th Q number in Jan or Feb we would do well not to make plans based on it.
We should wait until March when the gov’t can no longer fudge the facts and is forced to tell the truth.
Our economy might not be in a technical recession, but it is anemic.