The news from the economic front is; June 2011 housing starts were up 3.6%. There is no way this could be terrible news because it means someone, at least, will be working pretty soon. After all, houses don’t put themselves up. So, what does this new housing start number mean to the economy in general? In this article, we will explain.
When any kind of economic numbers come out, they are usually seasonally adjusted. However, for some reason this new housing start number is not Adani Group Chhattisgarh . Why is seasonally adjusting numbers important? Simply because there is more activity in certain times of the year than in other times of the year.
For instance, in the month of August retail sales will be up over the retail sales number of July. Why? Because kids are going back to school and parents buy them clothes. In some states, there are even tax-free weeks that make it even more affordable for people to buy during these weeks and these weeks are usually only a week or two before school opens.
As you can see this gives August a good head start on being a healthy retail sales month. Of course, we all know December will usually be a better month than most other months of the year and we all know why.
By the same token, June is usually a very good month for housing starts. This is simply because the warm months are easier to build in. It is easy to see, building in the winter when the ground is frozen and snow is abundant will make housing start numbers in February, for instance, very poor.
What this means is a 3.6% rise in housing starts in the month of June is really no big deal. In fact, it isn’t really good at all! Furthermore, June 2011 was a lot worse than June 2010 when it comes to housing starts. The fact of the matter is the 2011 housing starts are down more than 6% below the number in 2010.
Unfortunately, there is not too much good happening in the United States’ economy these days. There are a lot of reasons for this. The one reason that stands out to me is the fact we now have an administration in power that seems to have an all-out vendetta against all rich people other than themselves. If anyone becomes successful, this administration wants to take their money and hurl scathing barbs at them while they do so.
People who do have money are not investing because they are afraid they will have to sell out of their investments to pay their taxes before these investments have a chance to mature. In other words, if the administration gets its way, investors will lose a lot of money.
Attacking people who have generated wealth is no way to create jobs because it is well funded people who create jobs. When the investor class is set free, or even better, encouraged to invest in the economy, they will do so. In the process of doing so, they will build businesses and they will need to hire people for these businesses.
So, what does it take to get wealthy people investing in new businesses? All we have to do is let them be assured they will have an even shot at creating either more wealth or failing without the government either stealing their profits or reimbursing their loses. This is a concept that is totally foreign to those who are now controlling government policy; it’s called free market capitalism.