Wednesday, August 27, 2014

A comment from Tom Lawler on Household Estimates; Thursday: Unemployment Claims, Q2 GDP (2nd estimate), Pending Home Sales

by Calculated Risk on 8/27/2014 07:44:00 PM

CR Note: Many analysts and reporters use Census data to estimate ongoing household formation. They are ignoring severe problems with the Census estimates ... from housing economist Tom Lawler:

For well over a decade I have been trying to get Census to explain the widely different estimates of households from different surveys. In a 2004 "summit" that I hosted at Fannie Mae, I asked Census officials "what household number from a time series perspective should analysts use as the best estimate from Census?" The answer I got a decade a go was, "that's a good question." Read the attached.

Household Estimates Conundrum: Effort to Develop More Consistent Household Estimates Across Surveys

And here is the conclusion section from the above.
We have an obligation to our data users to provide clear, unambiguous explanations and guidance about the estimates we provide on households (occupied housing units). In our role as the "leading source of quality data about the Nation’s people and economy," we ultimately should be able to:

1. Develop a common methodology that produces reasonably consistent estimates of households (and, therefore, vacant housing units) across our current surveys,

2. Develop a common methodology that may still produce noticeable differences but still be able to explain differences and recommend a preferred estimate, or

3. Be able to explain why we cannot develop a common methodology and be able to explain the differences and provide guidance about the agency’s preferred estimate of households (occupied housing units) for the United States.
It's been a long slog ...
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 300 thousand from 298 thousand.

• Also at 8:30 AM, Gross Domestic Product, 2nd quarter 2014 (second estimate). The consensus is that real GDP increased 4.0% annualized in Q2, unchanged from 4.0% in the advance estimate.

• At 10:00 AM, the Pending Home Sales Index for July. The consensus is for a 0.5% increase in the index.

• At 11:00 AM, the Kansas City Fed manufacturing survey for August. This is the last of the Fed regional surveys for August.