My Mortgage Blog

When the final bell clanged at the end of last week, we seemed to have a rare gift before us: some bona fide good news.

The California economy reportedly created about 96,500 new payroll jobs in February, the largest monthly increase ever seen by the bean counters who have been working on California’s employment data since 1990.

Let’s put this in perspective. The gain in jobs reported in January was…700. Wow! California has the second highest unemployment rate—12.2%--in the nation, trailing only Nevada, with its 13.6% unemployment rate.

But seriously, my friends—if 96,500 jobs were created in California in February, that adds up to about half of the 192,000 new jobs created in the entire nation. Doubtful, to say the least. So hold the champagne.

Meanwhile, it was gratifying to see that about 15,500 net new jobs were added in the construction sector, which has been languishing for over two years. This too seemed a bit odd, though, given that the sales of new homes reportedly plunged to the second lowest level since at least 1963, when the figures for new home sales were first tallied. Does the left hand know what the right is doing here?

Many economists doubt the accuracy of the reported February sales slump, just as there is skepticism about the number of new California jobs. As is often the case, many in the industry point to the history of volatile errors in new-home sales computations. As Tim Sullivan of John Burns Real Estate Consulting declared, “I’m not saying the numbers are wrong. (But) they’re not as bad as they seem.” (So what is it exactly that you’re saying?)

Nearly two weeks ago, the Commerce Department reported that the number of new homes starting construction in February fell a stunning 22.5% from January’s starts. This was the second-lowest level on record over the past fifty years. Permits also set a new record low.

Stop Making Sense was the title of the David Byrne concert film of his band, Talking Heads. It could also be the title of a study of these economic reports. They do not compute. They are either lower than is credible, as with new housing sales, or higher than seems possible, as in the case of California’s employment data.

Perhaps the glue has shaken loose and is not holding together the machines that coordinate the figures that flow in from so many local markets. Perhaps, in fact, we are about to see major changes as the very slow economy gains genuine steam. Or perhaps the stars are simple misaligned this month and we’ll have to wait for some kind of explanation of all this.

In any case, I wouldn’t place any bets on the future of interest rates based on these data. I would, however, stand by the hour-to-hour guidance offered by MarketWatch. It is serving us well.