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27 March 2007

The answer is -3.9% (plus or minus 17.4%)

The government released its report on new home sales for the month of February; here is how the story was reported by Reuters (as seen on the New York Times website):

WASHINGTON, March 26 (Reuters) — Sales of new homes unexpectedly fell in February, hitting their lowest level in nearly seven years, according to a report released on Monday. New-home sales slid 3.9 percent, to an annual rate of 848,000 units, the lowest since June 2000, from a downwardly revised pace of 882,000 in January, the Commerce Department said. Sales for November and December were revised down as well.

And here is the Census Bureau press release:

Sales of new one-family houses in February 2007 were at a seasonally adjusted annual rate of 848,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.9 percent (±17.4%)* below the revised January rate of 882,000 and is 18.3 percent (±12.2%) below the February 2006 estimate of 1,038,000.

There are several amazing things about this. First, with all of the resources of the federal government, we can't get better than a 17.4% half-width for a 90% confidence interval? Second, people treat these point estimates like they mean something; the DJIA dropped by about 50 points after this "news" hit the wires. And finally, why can't I get stuff published with confidence intervals that wide?

Posted by Mike Kellermann at March 27, 2007 5:30 PM