Does anyone know what to make of the contradictory data coming out this week? Unfortunately, the data is released as monthly, not as yearly, changes, so we get a lot of noise. At least in the housing sector, they report year-over-year data, but that seems to be the exception. Leading indicators of real hourly wages and consumer spending, while strong over last month, may not be strong year-over-year. Does anyone know?
PLUSES for the Economy
Wages and salary up .5%
Personal income up .8% (mainly due to new Medicare payments)
Consumer spendings up.6% (up .2% inflation adj.)
Construction spending up .9%
Factory activity up (mainly metals, eletronics, transp)
Production up
Employment index up
NEGATIVES
Consumer inflation near 2%
Dollar falling vs yen and euro, 20yr low vs Canad $
Residential construction jobs down 11,000 in March
Gold futures at 25 year high
Purchase managers index up
New order down
Inventories up
Backlog of orders down
Prices Paid Index up
Benefits still shifted from employer to employees
I think it depends on how you are applying the data. The applicability of the data is not limited to the real estate markets only, and you could say they’re only indirect indicators. As a component of the national economy there are a lot of areas that do not qualify as being part of a bubble, per se.
In terms of our local economy, I think we’re still in a period of transition. If there’s going to be a freefall (and I think there is), that freefall hasn’t started yet and may not start for a while. It would be only natural during a transition period to have conflicting and inconclusive data and indicators. By the time everything is going in the one direction that momentum will have already reached its terminal velocity.
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