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Mixed Signals

10:40 AM, Feb 19, 2014 • By GEOFFREY NORMAN
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What we have been told is a “recovery” has a way of throwing off false trails.  We were told to expect a robust performance, this year, from the housing sector yet, yesterday, for example, we learn that home-builder confidence has not merely fallen, but cratered.   As Reuters reports:

U.S. homebuilder confidence suffered its largest one-month drop ever in February, hit by this winter's relentlessly severe weather and concerns about the costs of labor and building lots, the National Association of Home Builders said on Tuesday. 

The weather, of course, is the standby explanation for any, and all, bad economic news.  

Moving to a more hopeful development, Americans are not letting the weather keep them from getting divorced and that, according to Mark Zandi, is good news for the economy.  As Steve Mathews of Bloomberg writes:

The number of Americans getting divorced rose for the third year in a row to about 2.4 million in 2012, after plunging in the 18-month recession ended June 2009, according to U.S. Census Bureau data. 

And as Zandi explains:

“As the economy normalizes, so too do family dynamics. Birth rates and divorce rates are rising. We may even see them rise strongly in the next couple of years, as households who put off these life-changing events decide to act.”

Mr. Zandi makes Émile Coué look like Joe Bfstplk.

An alternative explanation might be that people have concluded that the economy is permanently in the ditch and there is no sense, any longer, in waiting for things to get better before acting.  In any event, it is going to be tough on all those people getting a divorce when they move out and find that nobody has been building houses for them to live in.

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