Whether it is retail shopping for Christmas or anything else, the official economists always come up with excuses to pretend that bad news is just a temporary anomaly. For Christmas, for lower than expected shopping in retail stores, they blamed online sales. But, as I wrote, that was not true:
The signs in domestic retail are not good either. When the numbers for Christmas shopping were disappointing, economists decided it must have been because more people were purchasing online. But now, it turns out, that Amazon’s business was not that great during the holidays.
Another oft-used excuse is the weather. But that didn’t work either. As Tyler Durden writes about housing at Zero Hedge:
By now the weather apologists will have let you know that the latest economic data disappointment – housing starts and permits – both of which crashed in January, is solely due to the weather (the same apologists who will tell you that any good news is due only to the “recovery”). Alas, this time even the most cursory glance beneath the headlines reveals just how sad the lies truly are.
Durden shows two charts. The first provides a bar graph of housing permits from December to January.
If indeed the weather was to blame, it would be the region that was hit the worst by the polar vortex, i.e., the Northeast, which would have been most impacted. Instead, we find that the one region where the ‘weather impact” was double that of the Northeast, was the West, i.e., California, where balmy weather resulted in a seasonally adjusted permits crash of 26%!
The next bar graph gives us housing starts for the same four regions of the country: Northwest, Midwest, South, and West. In this case, the Northeast is doing better than the other three regions of the country—even though the Northeast is being hit the hardest by the polar vortex.
So weather makes no sense as an explanation for anything. We are going to have to look for other factors to understand what is happening in housing.