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Calculated Risk on New Home Sales

Calculated Risk writes:

Calculated Risk: More on New Home Sales: Let's start with revisions. This month (November) is one of the few months were the initial report wasn't higher than the previous month. Usually the small reported gain in sales is then revised away in subsequent releases.... [T]he Census Bureau revised down sales for August, September and October. This has been the pattern for most of the housing bust; almost all the revisions have been down. I believe the Census Bureau is doing a good job, but the users of the data need to understand what is happening (during down trends, the Census Bureau initially overestimates sales)....

This graph shows New Home Sales vs. Recession for the last 35 years. New Home sales were falling prior to every recession, with the exception of the business investment led recession of 2001. This is what we call Cliff Diving! And this shows why so many economists are concerned about a possible consumer led recession - possibly starting right now...

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