July 25, 2012
Reuters must be trying to win a Pulitzer in the bad business reporting category (sorry folks, you’ve got some stiff competition). The headline of a piece on the Commerce Department’s report on new home sales for June warned of the largest drop in sales more than a year. Are you scared?
If you look at the data, you would notice that May had one of the biggest jumps in sales in the last year, raising the rate to the highest level since the fall of 2008. Furthermore, three quarters of the drop was explained by a 60 percent decline in new homes sales in the Northeast. That could be real, but my guess is that this is some artifact of reporting that will be corrected when these numbers are revised next month. (I have not heard about the collapse of the economies in in NY, NJ, and MA.)
A little context would be helpful on this one. If May and June’s sales are averaged, we would be seeing a strong uptick in sales compared to earlier this year.
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