Consider the Timing of Reporting

By: Ian Campbell | Thu, Aug 9, 2012
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Last week U.S. home prices in May were reported by S&P/Case-Shiller. The composite 20-city home price index, said to be 'a key gauge of U.S. home prices', was reported to be up 2.2% in May from April, and down 0.7% from May, 2011. This has generally been seen as good news - a possible 'green shoot' in the U.S. field of soggy economic ground as it were.

Consider broadly, beyond Case-Shiller or any other specific economic statistics, the importance of 'speed of change in economic condition' in the context of the time period for which statistics are reported. Since early May a number of important things have happened in both the Eurozone and the United States that are directionally negative since early May including (to note but a few):

Two - three months is a long time in a rapidly changing economic landscape. Consider what real value two-month old Case-Shiller, or any other two - three-month old economic statistic has when it is reported, and think hard about how much weight should really be given to such a statistic in the current economic environment by the governments in their planning activities, the financial markets, or anyone else for that matter.

Interestingly a second article that reports the Case-Shiller May report in a 'favourable to U.S. housing recovery way' is running a survey with its article. The single question asked is: "have home prices bottomed where you live". Votes are being recorded as I write this, but the first 2,492 respondents have replied:

Presumably this is what real 'feet on the street' Americans think now, not necessarily what they may have thought three months ago. Decide for yourself what such a survey means in the context of U.S. housing recovery or further decline, if anything. Note that based on the number of respondents, this survey may or may not have statistical validity depending on how many respondents come from individual U.S. cities and regions.

Topical Reference: A Look at Case-Shiller, by Metro Area, from Real Time Economics, The Wall Street Journal, Phil Izzo, July 31, 2012 - reading time 2 minutes; and Evidence mounts that home prices hit bottom last winter, from Economy Watch NBC News, Bill Briggs, July 31, 2012 - with accompanying survey - reading time 3 minutes.



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
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Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at
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