23 March 2012

A Confidence Man

The new home sales report for March was just released. The "takeaway" number was a bit below February, a bit below expectations, at 313,000. You can find it here.

Now, here's the kicker.

The headline:
"Sales of new single-family houses in February 2012 were at a seasonally adjusted annual rate of 313,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development."

Which is followed by (and won't likely ever be printed in mainstream press reports):
"This is 1.6 percent (±23.9%)* below the revised January rate of 318,000, but is 11.4 percent (±17.8%)* above the February 2011 estimate of 281,000."

So, what do the asterisks mean? Here's the footnote they tie to:
"* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero."

In other words, these "estimates" are wildly, I say WILDLY unreliable. The CIs are huge, and they're only 90% intervals! Common practice is 95% intervals (by definition, they're bigger, by how much depends on the sample data). Too bad Census didn't post those numbers.

In other words smores, there's no statistical (these are sample derived, recall) evidence that new home sales have improved over the last month, AND YEAR. So take that.

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