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:
Only 45,000 new homes were sold in August. The "steady job gains and low mortgage rates" Rugaber cited thus led to the sale of fewer homes than in March, April and May. It's also the same number as were sold during February, in the midst of the latest in a series of economic excuse-generating "brutal winters."
So how could Rugaber write what he did? Well, he shouldn't have, but his second paragraph gave us the "reasoning":
The Commerce Department says new-home sales surged 5.7 percent last month to a seasonally adjusted annual rate of 552,000. That followed an even bigger 12 percent jump in July, according to the government's revised figures.
Here's the Census Bureau's seasonally adjusted table:
Whether or not the seasonally adjusted results were calculated correctly, they provide a clearly misleading picture of the new home market — unless you think we're supposed to be impressed when August's actual sales are the same as February's.
The primary reason August's seasonally adjusted figure is so high is that actual sales during the previous five Augusts were so awful.
Readers will see in the first, not seasonally adjusted table above that the new-home in 2010 through 2014 peaked in April, May and June and nosedived after that (during all those, ha-ha, "recovery summers"). By contrast, the small decline in August 2015 compared to previous month was a relatively strong performance, which caused it to seasonally convert to a very high number.
In the 4-1/2 decades before 2008, actual August sales were typically among the highest of any month during a given calendar year. That hasn't been the case since the arrival of the POR (Pelosi-Obama-Reid) economy, now well into its eighth year. The best interpretation of August's raw result is that the "new normal" level of annual new-home sales will henceforth be 70 percent or so of the 750,000 or so observers (including those at AP) consider "healthy." The worst interpretation would be that August was a one-time artificially high fluke. Obviously, neither take is impressive.
Rugaber's utterly false headline ("US NEW-HOME SALES SURGE 5.7 PERCENT IN AUGUST TO 7-YEAR HIGH") and first paragraph — both are false because they aren't qualified by any mention of seasonal adjustments — are what most readers will see, especially those who get news alerts on their phones, tablets and computers. The vast majority of users who won't click through to read further have clearly been misled.
The AP and Rugaber may claim that what they have communicated in headline and opening paragraph represent the essence of their story. I contend otherwise. The correct headline, assuming that the wire service will never deign to report the raw numbers, which they really should, would have been "AUG. US NEW-HOME SALES RISE 5.7 PERCENT TO ADJUSTED 7-YEAR HIGH." Rugaber's second paragraph should have been the story's first. He shouldn't have used his original first paragraph at all.
Though that wouldn't really have been enough from my perspective, those two moves would have at least represented accurate reporting. What Rugaber and AP have presented does not.
Cross-posted at BizzyBlog.com.
