Home Depot Is No Canary

NEW YORK (TheStreet) -- Home Depot (HD) reported good earnings, which the media, in their simplistic and restrictive love of one-to-one relationships, saw as a certain sign of a recovering economy.

The Daily Beast went with the phrase "good earnings and omens" in a headline. To Investor's Business Daily, Home Depot's numbers affirmed that a housing recovery is at hand. They said in a headline: "Home Depot, Valspar Results Point To Housing Recovery."

But let's cool those kitchen-remodeling jets for a moment. Nevermind that top-line growth was suspect and a decent portion of the positive earnings came thanks to efficiencies, a Home Depot specialty.

Here's the other important item to remember as Home Depot beats earnings estimates and tweaks forecasts up: Home Depot has been doing pretty well throughout our long, economic nightmare. Nearly all the media framed Home Depot's quarterly earnings as a definitive turning point. Forbes did quite well to remind us of the underlying truth:

While the housing market has lagged the broader recovery, home-improvement stores never experienced the same troubles as other retailers. Homeowners chose to redo or spruce up their homes instead of selling, and headed to places [like] Home Depot and Lowe's (LOW) for the supplies. Home Depot stock has nearly doubled in three years. Meantime, the S&P 500 gained only 39%.

Home Depot is back, so they economy is back! Actually, Home Depot never quite left us.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

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