Terrible job in reporting housing data

Seth Jayson from The Motley Fool writes Tuesday that the business media isn’t reporting housing data from the federal government correctly.

Jayson wrote, “As usual, the headline mills out there are carrying misleading information, either because they can’t understand the statistics they’re reading, or because they don’t care to report the numbers truthfully.

“For instance, this story began the day with the patently false title of ‘New Home Construction Up Last Month,’ and carried a blurb reading, ‘Construction of new homes and apartments rebounded in October by the largest amount in eight months…’

“That’s utterly, irresponsibly wrong, and writer Martin Crutsinger and the AP should be ashamed. No journalist who actually understands what he’s talking about would ever utter such garbage. (Indeed, judging from the extensively revised article now replacing the original, Crutsinger and the AP seem to have belatedly decided to reverse their conclusion.) Here’s why.

“October housing completions, as reported by the Census Bureau here, came in at a ‘seasonally adjusted annual rate’ that was 1.9% ‘above’ the revised September estimate. Here’s the problem: That monthly number is subject to a relative standard error of +/- 8.9%, meaning it’s actually not possible to determine whether there was an increase or a decrease from last month. Moreover, we all know by now that month-to-month comparisons are bogus — they often illustrate typical, seasonal variations. Year-over-year comparisons really matter, and on that basis, things look terrible.”

Read more here.