Are there really ”green shoots” of economic recovery? Some economists are wondering if the reports of housing market recovery by Wall Street and the Administration are real or imaginary. John Williams of Shadow Government Statistics argues that the 11% gain for new houses sold in June (following May’s 2.4% gain) was not statistically meaningful. He says that what we’re experiencing is a case of bottom bouncing, with the average rate of homes sold in the last eight months 70% less than 2004 and 2005 levels. He adds that “current year-to-year contractions reflect only a plateauing of housing activity at historic lows, not an upturn or turnaround in economic activity.” The economists we spoke to for our Mid-Year Economic Outlook said that the housing outlook was still very anemic and cited the huge amount of unsold homes and inadequate stimulus plans as a drag on the housing market. For now, it seems, talk of recovery in the housing sector doesn’t have a very solid foundation.
