Thursday, August 07, 2008

Spinning the Economy into a Tailspin

Item 1.

June pending home sales up unexpectedly

WASHINGTON (Reuters) - Home sales contracts signed in June unexpectedly rose across the country to its highest level since October, but still were well below year-earlier levels, a real estate trade group said on Thursday.

The National Association of Realtors said its Pending Home Sales Index, which is based on contracts signed in June, was up 5.3 percent to 89.0 from a downwardly revised 84.5 in May.

It was the highest reading for the index since October, when it was at 89.8.

Item 2.

U.S. July Retail Sales Slow, Hurting Back-to-School

Aug. 7 (Bloomberg) -- U.S. retailers' sales rose in July at the slowest pace in four months because of higher fuel and food costs.

The world's largest retailer said August sales may rise 1 percent to 2 percent following a 3 percent gain in July, while Costco Wholesale Corp. posted a 10 percent increase.

U.S. retailers' sales at stores open more than a year grew 2.6 percent last month, the smallest gain since March, the International Council of Shopping Centers said today.


Okay. In Item 1, the National Association of Realtors revised its June home sales contract projection downward to 84.5 in May, reflecting its negative perception of the market. But in June, actual home sales contracts were higher than that. Surprise!

One might expect this contrary activity and the fact that contracts reached their highest point since October to be positive news, no? Maybe it would have prompted those making projections to question their method. Instead, we get a negative twist to the fact that home sales contracts were up, not down.

In Item 2 the sentiment clearly is: “Sales are up. Oh, woe is me.” These numbers may not be reason for celebration, and the fact that the numbers are lower than previous months is certainly relevant. But does this situation warrant the negative twist being applied to it?

These are two good examples of the negative bias appearing regularly in the media, an industry whose charge is to tell us the unvarnished truth, not some reporter’s perception of the truth, or even some housing or retail insider’s perception of reality, without adequately labeling it as such.

Maybe it’s because we have too many news outlets with 24-hours a day to fill with content, or maybe it’s because we have journalists who have either mis-learned or were mis-taught the expectations of their craft, or maybe it’s a combination of the two, but mis-reporting of events like this has a definite effect on the masses who think they are getting the straight poop.

Poop it is, but straight it ain’t.

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