Bernanke’s Fed on housing: Contraction is ‘ongoing’
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Most of you already know the Federal Reserve today left interest rates unchanged. For those who enjoy parsing Fed statements, here’s what the Fed’s Open Market Committee has been saying about housing over the last 20 months. To make things interesting, I’ve added, in parentheses, DataQuick’s median sales price for L.A. County for that month.
January 2007 ($520,000): ‘...some tentative signs of stabilization have appeared in the housing market.’
March 2007 ($540,000): ‘... the adjustment in the housing sector is ongoing.’
May 2007 ($550,000): ‘...the adjustment in the housing sector is ongoing.’
June 2007 ($545,000): ‘Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector.’
August 2007 ($550,000): ‘...the housing correction is ongoing.’
September 2007 ($525,000): ’... the tightening of credit conditions has the potential to intensify the housing correction.’
October 2007 ($500,000): ’... the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction.’
December 2007 ($470,000): ‘...incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction.’
January 2008 ($458,000): ‘... incoming information indicates a deepening of the housing contraction.’
March 2008 ($440,000): ‘...the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.’
April 2008 ($435,000): ‘...tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.’
June 2008 ($415,000): ‘Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.’
August 2008 (n/a): ‘Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters.’
So we’ve gone from ‘signs of stabilization’ to ‘adjustment’ to ‘deepening contraction’ to ‘ongoing contraction.’ Is ‘ongoing’ better than ‘deepening’?
--Peter Viles
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo: Federal Reserve Chairman Ben Bernanke takes in a baseball game. Credit: Associated Press