This relates to our discussion regarding how economic data can be manipulated by the media.
From the Wall St. Journal this morning:
Housing Starts Jump in May for Third Month
Single-family housing starts rose in May for the third straight month, fresh evidence the beleaguered housing market is beginning to stabilize. But the glut of homes in parts of the country will continue to drag down prices. Housing starts jumped 17.2% in May from April to a 532,000 annual rate, the Commerce Department said Tuesday, boosted by an increase in multifamily units.
Housing starts ratchet up in May
NEW YORK (CNNMoney.com) — The nation’s builders boosted their production in May, starting new housing units at an annualized rate of 532,000, up 17.2% from the revised estimate of 454,000 in April.
From Fox News:
Housing Starts Rise 17.2%
Housing starts climbed much more in May than the market expected, according to a report by the U.S. Commerce Department issued Tuesday, providing another possible sign that the beleaguered housing market is finding some stability.
Here’s the actual trend:
You’ll notice that the Wall St. Journal article mentions that ‘multifamily’ units boosted the May number. If you look at the details behind the numbers – the total was inflated by building permits for apartment buildings – not because single family home building is increasing. Again – to know the truth – you’ve got to examine the details on your own.
If you read the articles in their entirety – you’ll usually see information like this buried within the article:
“Still, home construction was well below year-ago levels, with the pace of starts down 45.2% from May 2008.” Headlines never reveal this type of information.
“The good news on housing was offset by another grim report on the state of U.S. manufacturing. Industrial production tumbled 1.1% in May from April, the Federal Reserve said. Capacity utilization fell to 68.3%, well below its long-run average, an indication that there is still a great deal of disinflationary slack.”