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Commentary: It Happens Every Month

The March employment situation report was another in a series of labor reports that had analysts scratching their heads--on the left or right side--depending on their politics. Just as there is no Democratic or Republican way to collect garbage (okay, there might be depending on how much government you want), there should be no Democratic or Republican economic data. The numbers are what they are, not what your political lens tells you they are. That said, when data such as the March report are released--weak job growth, yet a drop in the unemployment rate--conspiracy theorists emerge from the woodwork.

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Commentary: No News Is…

The explanation from the National Association of Realtors (NAR) for the drop in the Pending Home Sales Index (PHSI) for February has to be viewed with a jaundiced eye. According to the NAR, the PHSI dropped because of the low inventory of homes for sale. Of course, that wasn't offered as an explanation one month earlier, when the inventory of homes for sale dropped to its lowest level since December 1999 and the PHSI increased. But when the PHSI fell in February, and the inventory of homes for sale increased, the still-low inventory became a convenient excuse.

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Commentary: Headlines and Bottom Lines

One of the most interesting results of poring through economic data reports is that the details often tell a different story than the headline. The recent report on retail sales is a case in point. While the vast majority of commentators were impressed with a strong 1.1 percent month-over-month increase in overall sales, those who scratched the surface were rewarded for their efforts by learning more than half of the month-over-month increase came from an increase in gasoline station sales as prices. In addition, coverage of the recent report on housing permits and starts was dominated by the increase in both permits and starts. A closer look at the permit-starts data revealed another important phenomenon: a shift from single-family to multifamily construction.

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Commentary: Budget Pains

It's been two weeks since the dreaded sequester took effect, and so far, the only casualty has been the White House tour. There actually have been some positives, with both parties presenting budgets. However, both the GOP budget and the Democratic plan have one major similarity: Each is dead on arrival and destined to at best be a one-house budget, which leaves the country back where it was. Setting a target for practical balance would bring us closer to reducing the deficit and with less pain.

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Commentary: Go With The Flow

Perhaps the most important piece of economic news in the last few days was not the continued drop in the unemployment rate or the positive blurbs in the Beige Book or even the Dow reaching a new record high, but Thursday's quarterly Flow of Funds report. According to the report for Q4 2012, household assets grew to $79.5 trillion in the fourth quarter, an increase of $1.3 trillion--not too shabby. Household financial assets were up $784 billion to $54.4 billion but home equity (the value of household real estate less loans against that real estate) grew $452.8 billion, the result of two moving parts: real estate values (which increased) and household mortgage liabilities, which dropped.

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Commentary: Impact of Sequestration–People Will Die

The sad fact of the budget sequestration being played out in Washington is how avoidable it was. The sadder fact is that however temporary it might prove to be--and that appears from a distance to be more of a wish than a forecast--it will affect real people, and not well. The effects of sequestration go beyond the impact of jobs loss because defense or other contractors are not hired or because federal workers are furloughed. The effects will put even more homeowners at risk of delinquency, or worse, foreclosure, just at a time when the housing sector is recovering.

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Commentary: Minimal Minimum

President Obama unleashed a predictable firestorm when he proposed during the State of the Union address that the minimum wage be increased to $9.00 an hour from the current $7.25. The reactions were expected: conservative economists criticizing the suggestion while progressives either endorsed it outright or noted the proposal was less than the $9.50 minimum wage proposed by then-candidate Obama.

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Commentary: A Capital Idea

President Obama faces a budget obstacle in his plans to rebuild crumbling bridges and address other pressing infrastructure needs. Unlike many governments, the United States does not have a separate budget for capital spending, which means each tax dollar is as likely to go to the construction of, say, a courthouse, as it is to paying the salary of a judge or court clerk who works there. What would having a separate capital budget do for the country? For starters, it would rationalize our spending and make it more difficult for lawmakers to lard up spending bills with long-term projects.

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Commentary: Will Sunday Football Supersize The Economy?

So, there's some sort of football game this weekend. Like many economists, I’m a bigger baseball fan than football, intrigued by the statistics in baseball, statistically a zero-sum game unlike most other sports. Just about every positive statistic in baseball for one player has a corresponding negative statistic for another.

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Commentary: Don’t Raise the Bridge, Lower the Water

Two housing reports in the week just demonstrated, yet again, economists are not infallible. On Tuesday, the National Association of Realtors (NAR) reported existing home sales for December: 4.94 million against a consensus forecast of 5.1 million. Then on Friday, the Census Bureau and HUD reported jointly 369,000 new homes were sold in December compared with a consensus forecast of 388,000. There are several important housing related reports due out next week, but they will take a backseat to the report on fourth quarter GDP and Friday's report on the employment situation.

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