Regarding yesterday’s New Home Starts, an emailer writes:
You used to discuss the Commerce Dept.’s standard statistical error regularly. In light of that surprising Housing Start number, could you please update that?
Sure thing. I love this sort of data sifting exercise. (I used to do this all the time, but I could actually hear readers falling asleep through my screen).
Let’s go to the Census Department release.
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,032,000. This is 8.2 percent (±14.5%)* above the revised March estimate of 954,000, but is 30.6 percent (±6.7%) below the revised April 2007 rate of 1,487,000.
As is so often the case, the devil is in the details:
As far as the April Hosuing Starts go, a monthly change (seasonally adjusted annual rate) was 8.2%, versus an
estimated relative standard error of ±14.5%. Hence, the monthly change is not statistically significant; that is, it is uncertain whether there was an increase or decrease in Housing Starts from March to April.
As to the 30.6% year over year drop — that is ±6.7% — and therefore is statistically significant.
[UPDATE: Flenerman in comments asks the same question]
And I thought I was the only one who cared about such mathematical trivialities . . .
NEW RESIDENTIAL CONSTRUCTION IN APRIL 2008
Manufacturing and Construction Division
U.S. Census Bureau, MAY 16, 2008 AT 8:30 A.M. EDT