Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour with small gains on little real news. The Richmond Fed regional index gained 7 points in July to 14 on strength in new orders and employment.
One of the hallmarks of modern economic and business data is the initial release of strong numbers to paint the desired picture, only to revise these figures quietly away. Mike Shedlock recently reviewed some data from the National Association of Realtors or NAR and found some significant revisions that indicate a need to take NAR data and forecasting with a grain of salt. In 2007 the NAR stated that 5.75 million homes were sold in June on a Seasonally Adjusted Annualized Basis or SAAR. Ultimately that figure was revised down to just 5.12 million units SAAR a not insignificant revision of 11%. The always overly optimistic Lawrence Yun NAR senior economist noted in 2007 that the sales decline bottomed in 2007 at just over 5 million units SAAR. The actual bottom occurred in 2010 reaching a nadir of 3.3 million units SAAR. While revisions are to be expected they’re not a valid excuse for sloppy data and poor research.