We’ve tore these numbers apart enough in the past that it would just be going thru the motions to do so again.
For those of you new to the site, check out these prior discussions on the problems with this (and related) data series:
I cannot find the piece we did last year about the tendency for this data to mean revert month-to-month (Can anyone find that post? I’ll update it later on site).
Bottom line: Any single month’s data is very noisy, while a moving average is much more accurate. In fact, whenever one month was at any particular extreme (in either direction), the following month nearly always reverted.
So when this news comes out later today, take it with a grain of salt.
UPDATE March 20, 2007 3:26 pm
Earlier today, I mentioned the issue of new Home Starts — the data I was trying to track down was about New Home Sales.
Here’s what we found about Sales:
a) Often, the data appears to be "statistically insignificant," according to the Census Bureau;
Strong historical numbers (like plus 13%) tend to be subject to
revision, but mostly stay net postive, albeit somewhat moderated;
c) Over the past 10 years, double digit months have been followed by flat to negative data the very next month (Mean Reversion).
I suspect (but have not tested) that a similar pattern exists for New Home Starts . . .