August's seasonally adjusted Pending Home Sales Index value contained in the related press release from the National Association of Realtors was the lowest in the past five months, and 2 percent below April's level.
Disclosing the size of the recent slump apparently wasn't considered important at the Associated Press, aka the Administration's Press. What was news at AP, whose Josh Boak essentially copied NAR's release and added standard boilerplate about job growth instead of engaging in informative journalism, is that the index is up by over 6 percent from a year ago, even though that increase ended several months ago.
Here is the table contained in the NAR's release, with the row showing the change since May added by me:
Of course, the PR people at NAR are going to spin their data in a favorable manner. It's the journalist's job to discern the important facts. It is far more relevant that seasonally adjusted pending sales have dropped by 2.6 percent in the past three months than it is that they have risen 6 percent in the past 12, because that three-month drop is a strong indicator of the housing market's and to an important extent the economy's direction — which is in many respects not positive.
Here are several paragraphs from Boak's dispatch (bold is mine):
US PENDING HOME SALES FALL IN AUGUST
Fewer Americans signed contracts to buy homes in August, as pending sales slumped amid broader concerns about the U.S. stock market and global economy.
The National Association of Realtors said Monday its seasonally adjusted pending home sales index fell 1.4 percent to 109.4 last month. Signed contracts to purchase homes have climbed a healthy 6.1 percent over the past 12 months, aided by steady job growth and low mortgage rates.
The August figured indicate that home sales lack the stamina to keep accelerating. Uncertainty in the financial markets and rising prices for homes are stirring doubts about affordability for many would-be buyers.
Note how Boak blames "Uncertainty in the financial markets and rising prices for homes" instead of the Obama era's unprecedentedly mediocre economic growth. Also note how the bolded sentence implies that August represented the first letup in the "accelerating," when the fact is that it has basically been a three-month trend.
But disclosing that three-month trend would have busted the usually happy talk about job growth which is a staple of AP economic reports these days:
Employers have continued to hire at a steady rate in recent months, yet wage growth has been running below the increase in home prices.
Boak ignored the fact that August's job growth was disappointing. August's raw (i.e., not seasonally adjusted) job additions represented the worst August performance since 2010.
"Wage growth" is relevant, but household income is even more relevant. The Census Bureau recently reported that real median household income in 2014 was still 6.5 percent below where it was seven years earlier, and has barely moved off of its post-recession trough of -8.1 percent. But when it had the chance, the AP didn't report these crucial statistics, which may explain why Boak didn't consider them.
Cross-posted at NewsBusters.org.
