With the "final" first-quarter GDP revision, May employment and a first estimate of M3 for May all available at the end of the coming week, I have targeted the May SGS newsletter around the Monday following (June 4th), so as to address those developments. Updated Alternate Data Series postings will be made for the GDP, the monthly U.S. Dollar, and M3 (based on three weeks of data) on June 2nd.  
Best wishes to all -- John Williams

On Thursday, regularly-volatile new home sales were reported up 16.2% for the month of April, and Wall Street's spinmeisters went to town. The hypesters who tried to weave that isolated and volatile number into a housing recovery story would be comfortable working for the propaganda ministry of the average totalitarian state.

Up front, the jump in monthly new home sales was not meaningful, reflecting little more than normal high monthly volatility and an annual benchmark revision. The gain of 16.2% (14.3% net of revisions) barely fell outside the 95% statistical confidence interval of +/- 15.8%, which means that 1-in-20 times the monthly reporting error would be expected to be greater than 15.8%. Also, the benchmark revision goosed the current number with relative downward revisions to prior periods. The Census Bureau can come up with any monthly change it wants when the prior-period seasonal adjustments are published, as they were with the April data.

The most meaningful way of looking at the new home sales numbers is in terms of year-to-year change, preferably on a three-month moving-average basis, so as to temper the random monthly volatility. April's annual change was reported at a contraction of 10.6%, and down 18.9% on a three-month moving-average basis. The same numbers for March were contractions of 25.0% and 23.7%, respectively.

April existing home sales, reported Friday by the National Association of Realtors, were down by 2.6% (2.1% net of revisions) for the month, 10.7% for the year.

Also among last week's light economic reporting was a monthly gain of 0.6% (1.4% net of revisions) in April's new orders for durable goods. This is another highly volatile series in terms of month-to-month change. Annual change on a three-month moving-average basis narrowed to a 0.3% contraction from a 0.8% contraction in March, annual changes more consistent with a contracting rather than expanding economy.

Key indicators and anecdotal evidence continue to suggest a much weaker economy than commonly viewed by the markets. Accordingly most upcoming reporting should come in below expectations.

Consensus forecasts are for the 1.3% annualized real (inflation-adjusted) quarterly growth rate for first-quarter GDP to be cut nearly in half in Thursday's (May 31st) revision. While such is a reasonable expectation, the growth rate may be getting too close to zero to be stomached by the Bureau of Economic Analysis. A 0.7% annualized growth rate is less than 0.2% quarter-to-quarter. The difference between GDP growth and contraction at that level is little more than statistical noise.

Friday's (June 1st) May jobs growth and unemployment rate are more likely than the GDP to disappoint market expectations.

Full details will follow in the newsletter.

___________________________

May's "Shadow Government Statistics" monthly newsletter should be posted about June 4th. An e-mail advice of same will be sent.