Today at the Assocated Press, aka the Administration's Press, Martin Crustsinger covered the Census Bureau's report on new home construction in the usual way. Regardless of whether a given month shows improving or declining data, the wire service's overall message is almost invariably, "Things are really getting better. No, really."
The sentence promoting that point of view in Crutsinger's report came from one of the AP's go-to analysts:
"The improving trend should continue, supported by generally low rates ... and strong job growth," said Jennifer Lee, senior economist at BMO Capital Markets.
Well, job growth really isn't that strong by historical standards, which is why we're well into the sixth year of an alleged "recovery." Additionally, many of the jobs people are getting either don't pay well, are part-time in nature, or both. So it seems by no means certain that "the improving trend should continue."
But apparently, Ms. Lee is someone AP can count on for a sunnyside-up quote. A Google web search on ["jennifer lee" "bmo capital markets" "associated press"] (typed exactly as indicated between brackets) since January 1, 2012 returns an awful lot of items. Isn't there anyone else out there you can talk to, folks?
Considering one of the paragraphs which preceded it, one late paragraph in Crutsinger's report was a bit of a show-stopper. Here are the earlier and later paragraphs in question:
... The weakness (in housing starts, which were down 2.8 percent nationawide) stemmed from a 15.4 percent plunge in apartment construction, a category that tends to have big swings from month to month. Construction of single-family homes was up 4.2 percent, the third gain in the past four months.
... Showing strength in October was the South, which posted a 10.1 percent jump on construction starts. All other regions of the country recorded declines. Construction fell 18.5 percent in the Midwest, 16.4 percent in the Northeast and 10.9 percent in the West.
So the nation as a whole saw gains, even though three of its four regions showed double-digit declines. How can that be?
The answer is that the majority of all homebuilding is being done in the South — to a degree vastly disproportionate to its percentage of the nation's population.
As defined by the Census Bureau, the South includes the following 17 states: AL, AR, DC, DE, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, and WV. These states currently have about 37 percent of the nation's population, but well over half of its home construction and home sales.
Additionally, the South's percentage of the new homebuilding pie has increased dramatically from a decade ago, to an extent not nearly fully explained by migration patterns:
What do most states in the South have in common? With the exception of DC, DE, MD, WV, they've far more often than not been Republican-governed bastions of fiscal and economic conservatism. In other words, they're governed in a manner diametrically opposed to how the federal government and most blue states operate.
Imagine how truly awful the long-tepid housing recovery would be if the South wasn't carrying the rest of the country. I suspect that equivalent statements could be made about many other economic metrics and industries.
Cross-posted at BizzyBlog.com.
