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Chart Of The Day: Housing Starts - Found In Seasonal Translation... Again

Tyler Durden's picture


Today, we got more great news on the housing front as housing starts rose from an upward revised 910K (was 890K) to 917K, modestly beating expectations of a 915K print. This was a blistering number, and as the mainstream media will have you know, was the second highest since early 2008, lower only compared to the very amusing 982K starts recorded in the dead of winter in December of 2012. All of this would be great if it didn't have one rather profound two-word caveat: "seasonally-adjusted." What happens when one strips away the Arima-X-12 seasonal adjustments? We have the answer! As the chart below shows, when one maps the seasonal pattern in the winter, the November-February three month period, one gets the following chart....

... What one doesn't get, is how a 0.2K increase in not-seasonally adjusted housing starts (from 62.2K to 62.4) manifests itself in a 76K surge in seasonally adjusted house starts.

We are confident the government's assorted propaganda outlets will promptly explain...

Don't believe us: check for yourselves.

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Tue, 03/19/2013 - 09:25 | 3346540 Chuck Norris
Chuck Norris's picture

Who says you can't print houses?

Tue, 03/19/2013 - 09:43 | 3346584 GolfHatesMe
GolfHatesMe's picture

3D printers on their way to Detroit

Tue, 03/19/2013 - 10:18 | 3346806 BKbroiler
BKbroiler's picture

The last thing Detroit needs is more houses.

Tue, 03/19/2013 - 10:50 | 3346983 smlbizman
smlbizman's picture

can someone please tell me what season we are always adjusting to or for?

is it basebal season, football season, spring rock fish season, mares coming in season?.....

Tue, 03/19/2013 - 11:42 | 3347329 Jena
Jena's picture

Whatever is in season, that's what it is adjusted for.  Ask your waiter for today's prices.

Tue, 03/19/2013 - 20:03 | 3350336 TheInformed
TheInformed's picture

You know, I love this website, but why did the author choose to show data from 2010 -> present???  Why did we not get housing starts from 2004->present? Would that data contradict the authors position?  Would a regular pattern emerge?  

I just wish more posts would cover '2004/5/6 -> Present' otherwise we have no reference if this is a legitimate problem or not.

Granted, I could/should do the research myself, but who has the time?  Apparently this guy did... and he stopped at 2010??  It's interesting at least.


Tue, 03/19/2013 - 13:26 | 3348149 Sokhmate
Sokhmate's picture

We're adjusting to/for the season that starts or ends in Decembuary, up till the season that starts or ends in Octomber, going back to Jugust, then on to Tuesday, when it's most windy.

aka the four seasonings.

Tue, 03/19/2013 - 10:02 | 3346700 Spider
Spider's picture

Our trusted government numbers...

Tue, 03/19/2013 - 13:37 | 3348235 Clark Bent
Clark Bent's picture

When consequences occur that do not harmonize with the happy numbers, will this transfer into plausible deniability? Such as a Congressman bleating over the PA system of his armored car that he/she didn't do anything to stop the spending and printing becuase he/she thought we were in a recovery too? 

Tue, 03/19/2013 - 10:09 | 3346753 NoDebt
NoDebt's picture

How can the seasonally adjusted number be MORE volatile than the raw data?  Aren't seasonal adjustments typically applied to REDUCE the month-to-month volatility of numbers such as this?

Oh, wait.  I get it.

Tue, 03/19/2013 - 13:28 | 3348169 Sokhmate
Sokhmate's picture

Refer to my comment above. To reiterate, Volatility is affected by how windy the Tuesdays are in a particular season.

Tue, 03/19/2013 - 10:33 | 3346879 AbelCatalyst
AbelCatalyst's picture

If you look back at the 2008 crash it didn't really drop until the -150k NFP hit... It was the economic indicators that really killed the market... Ben knows this which is why he must manipulate these numbers... He has no choice... It's his last policy instrument now that QE is wearing off... They can manipulate the markets as long as volume remains low, but when things start to heat up even they can't control the markets via fringe buying... Should be an interesting 2013!!!

Tue, 03/19/2013 - 09:26 | 3346542 mckee
mckee's picture

"Highest since 2008"

That was a good year!

Tue, 03/19/2013 - 10:12 | 3346781 adr
adr's picture

What is funny is that housing completions actually fell YoY. SO housing starts surged, but completions fell, makes a ton of sense.

Tue, 03/19/2013 - 12:27 | 3347638 mckee
mckee's picture

Union labor

Tue, 03/19/2013 - 09:29 | 3346545 Cdad
Cdad's picture

So...is a seasonally adjusted house cheaper than a non seasonally adjusted house?  I might be interested....you know, if Bernanke can get mortgage rates below 2%.

Tue, 03/19/2013 - 10:07 | 3346737 crusty curmudgeon
crusty curmudgeon's picture

You would think that whatever voo doo you might ascribe to "Seasonal Adjustments," they would at the very least be, well, seasonal.

"Everything you add to the truth subtracts from the truth."  - Aleksandr Solzhenitsyn

Tue, 03/19/2013 - 09:31 | 3346546 Dr. Engali
Dr. Engali's picture

I keep trying to seasonally adjust my paycheck,but somehow it never seems to work. I'm just as broke now as I have always been.

Tue, 03/19/2013 - 09:31 | 3346547 Ajax4Hire
Ajax4Hire's picture

Today the temperature is 78F(26C) Seasonally Adjusted.

The actual temperature is 35F(2C) for those folks who actually need to go outside, dress warmly.

Good thing the US Federal Government does not do weather reporting...yet.

Tue, 03/19/2013 - 09:33 | 3346556 Johnny_Reb
Johnny_Reb's picture

She was a four, but adjusted for the alcohol she was a ten.

Tue, 03/19/2013 - 10:37 | 3346891 CheapBastard
CheapBastard's picture

+5 ajax.......

Tue, 03/19/2013 - 09:32 | 3346554 Racer
Racer's picture

They must have been on the coke to think of that figure! Blatant manipulative propaganda

Tue, 03/19/2013 - 09:33 | 3346557 DeadFred
DeadFred's picture

The single best thing done for our economic recovery was the bribe given to the pimple-faced code jockey in change of the seasonal adjustments program. It's truly amazing what some people will do for a Bahamas condo/bimbo package.

Tue, 03/19/2013 - 09:37 | 3346563 Son of Loki
Son of Loki's picture

$45 psf is what they cost to build when you use illegals and pay them $5 an hour some builder told me. They turn around and (try) to sell them for $150 and up. he also said many of these foundations are not properly laid so they may have problems later...when the builder is long gone.....those boxes are not worth it he said.


Tue, 03/19/2013 - 09:38 | 3346567 EmmittFitzhume
EmmittFitzhume's picture

The Bernankenstein economy cannot be killed!  Not Never!!

Tue, 03/19/2013 - 09:39 | 3346574 orangegeek
orangegeek's picture

The Dow and SP500 are up again this morning.  The NASDAQ gapped up.


That's fucking awesome.  Ben and Barry are spending our future to hold onto another two years looking to control both houses.


And then the nazi in Barry gets unleashed.

Tue, 03/19/2013 - 09:47 | 3346591 IamtheREALmario
IamtheREALmario's picture

It is not Ben and Barry. It is the owners of Ben and Barry. They also have "a person" who programs in the stock market action for the day, which then feeds the computers at the banks and market makers. The whole market is now run and priced through computer programs. There is no chance of the free market messing it up.

Drones? Why drones? Because anyone can run a drone and be ananymous. They do not need human pilots who might have some remote thoughts of morals, ethics or an attachment to the indigenous species of this planet.

Tue, 03/19/2013 - 09:40 | 3346578 IamtheREALmario
IamtheREALmario's picture

In other words: "we are raising prices due to runaway inflation and to cover it, we are going to make it look as if there is a market for new houses". Oh, and our cronies who run the big homebuilders need to keep the banks off their backs, so they need to make is seem as if they are not zombie-companies.

Tue, 03/19/2013 - 09:46 | 3346600 ceilidh_trail
ceilidh_trail's picture

Sooooo, what should I be looking at and going by, housing starts or lumber/copper price trends? Gee, if only I could pick which numbers to trust...

Tue, 03/19/2013 - 09:47 | 3346608 TheProphet
TheProphet's picture

I don't mean to hijack the thread, but does anyone have a link to the leaked Blumenthal-Clinton memos?

The ONLY outlet even mentioning them is The Smoking Gun. Where are they?

Tue, 03/19/2013 - 09:57 | 3346669 newworldorder
newworldorder's picture

Seasonal/annual adjustments have turned Economists into math alchemists. They have taken  mathematics from a predictive science that most can understand to a level of confusion intended to numb the senses of most citizens.

My generation used to laugh at Soviet statistics under its various communist regimes. The economics profession and the boys and girls of our government agencies have wasted no time in taking the "propaganda" away from their coleagues in the Kremlin.

But.... We Americans are a trusting/stupid/uninformed, (take your pick) bunch most easily led by advertising and still believing in an America of a different time and place. Waking up one day, will be a most real nightmare.

Tue, 03/19/2013 - 10:40 | 3346910 Spastica Rex
Tue, 03/19/2013 - 10:03 | 3346683 Quinvarius
Quinvarius's picture

Time to bail on this shindig.  We had a chance before the tax increases and the second coming of the Eurpocalypse.  We had a real chance at 18000 DOW.  Barring a gigantic QE5, that is not happening.  The establishment is sounding and acting more crazy by the moment.  Tax raises an d bank account confiscations in a depression.  LOL.

Having given thought on the structure of QE5.  It must include buying bank stocks and debt in massive new offerings.  The banks need money, lots of money, and soon.  We can't keep buying treasuries at these levels or we will cripple SS and pensions.

Tue, 03/19/2013 - 10:05 | 3346723 rlouis
rlouis's picture

These houses will be leased to refugees from Cyprus for 6 months after which they'll be moved to a large parking facility in northern Detroit and destroyed.

Tue, 03/19/2013 - 11:02 | 3347063 SWCroaker
SWCroaker's picture

Um, the houses, or the refugees?   Didn't Bill Gross pen a piece way back on the former?   Pretty sure the are a bazilloin blame-them pieces that would fit the later....

Tue, 03/19/2013 - 10:08 | 3346743 adr
adr's picture

and there will be 100 or so guests and pundits who all proclaim the housing number is incredible and a sure sign the economy is picking up on every business channel. Not one person will call them out for the lie. Cavuto might mention the seasonal adjustment once, but his guest will proclaim that data is always seasonally adjusted to smooth out fluctuations and gives a clear indication of the direction of the economy.

There will be no mention of the largest seasonal adjustments in history since November of last year. Turing 20k annualized home sales into 800k, turning 2 million job losses into 200k+ job gains, etc.

How hard is it to say to one of these assholes, "You're lying, and here is the data to prove it." It doesn't even take ten seconds to find the data that proves the outrageous manipulation.

Tue, 03/19/2013 - 10:26 | 3346771 Ham-bone
Ham-bone's picture

this is based on a survey and then extrapolation...so it is pretty much whatever they want it to be.

"The statistics in this release are estimated from sample surveys and are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage."

Tue, 03/19/2013 - 10:21 | 3346821 htfan123
htfan123's picture

Aren´t you comparing annual rate data (seasonally adjusted) with monthly data?

Tue, 03/19/2013 - 10:25 | 3346836 ptoemmes
ptoemmes's picture

Can I get a discount on an unadjusted house?  

Tue, 03/19/2013 - 10:27 | 3346847 Telemakhos
Telemakhos's picture

From the small print at the bottom of the census.gov press release that Tyler linked:

Whenever a statement such as "2.5 percent (±3.2%) above" appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease.

And so, for single family housing starts, we find:

0.5 percent (±12.1%)

Holy God: that means housing starts could actually be anywhere from -11.6% to +12.6%.  Why would any journalist print that?  Why even put it on a press release?  That's long past the point where an honest press release (oxymoron?) would just say, "We don't have enough information to be able to determine whether single family housing starts have increased or decreased," with maybe a footnote giving what fragments of data are available, rather than a seasonally-adjusted increase over a revised figure for the seasonally-adjusted increase last month with a micro-print footnote at the bottom saying that it's all meaningless.

Tue, 03/19/2013 - 13:51 | 3348326 Clark Bent
Clark Bent's picture

These idiot journalists at Marketwatch haven't the slightest idea what you are talking about. They just get the press release and add the word "soared to" the new affirmative number, then their work is done. Nobody knows what the truth is, they just announce as directed. Nobody but the intelligent has any idea why we are not sailing into the new recovery. And you saw how well the intelligent did last November. Not a majority I'm afraid. The imbecile will have his day. 

Tue, 03/19/2013 - 10:30 | 3346852 htfan123
htfan123's picture

The actual annual rate data (Actual LTM data) for November 2012 was 760.1 units, the actual annual rate data for Feb 2013 is 805.8. So in the last 4 months the annual rate of housing starts rose 45.7K units (or 6%).  Seems pretty good to me. Maybe you guys want to go back to math school...

You can run the numbers from here http://www.census.gov/construction/nrc/pdf/startsua.pdf

Just add the actual starts for the previous 12 months in November 2012, and in February 2013...

Tue, 03/19/2013 - 13:55 | 3348354 snblitz
snblitz's picture

What does 0.1 of a housing start look like?

Tue, 03/19/2013 - 17:39 | 3349659 theprofromdover
theprofromdover's picture

(back to math school)

a big problem at zerohedge is that folks don't check the information for themselves.Believing ALL gummint data has been corrupted, doesn't get us any nearer the truth. Just another form of anti-propaganda, therefore we have to think more for ourselves.

FWIW at least the figures issued appear to average out over 12 months (so the adjustment is up and down & nets out at zero) The manipulation is more subtle than that.



Tue, 03/19/2013 - 10:44 | 3346931 CheapBastard
CheapBastard's picture

I'll wait until houses correct downward another 30-40% before I'm suckered into that Nightmare again.

Tue, 03/19/2013 - 10:53 | 3346996 NEOSERF
NEOSERF's picture

Unbelievable, simply unbelievable...now tell me again about the governments assurances on my deposits because rules don't seem to mean much to this government either when backed into a corner.

Tue, 03/19/2013 - 11:01 | 3347058 The Invisible Foot
The Invisible Foot's picture

All homes are being bought at distressed levels by "flippers", fixed up, then sold as apartments at home prices. :)

Tue, 03/19/2013 - 11:14 | 3347125 KCMLO
KCMLO's picture

I think I've just found my new favorite double-talk (from the census report fine print, attached to all the numbers claiming percentage gains):


* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

Tue, 03/19/2013 - 12:13 | 3347538 Element
Element's picture

lol Krugman was right, it's the broken-window effect (Jersy Shore effect?).

Tue, 03/19/2013 - 13:53 | 3348316 Edward Fiatski
Edward Fiatski's picture


Dog houses are probably included - only reasonable explanation. Propaganda machine is in full swing in the last couple of weeks, preparing the soil for Ben to begin his exit somehow, Stage left.

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