Tag Archives: Double Dip

Battered by storms and droughts, real gross domestic product (GDP) fell 0.1 percent in the fourth quarter, the Bureau of Economic Analysis reported Wednesday. The decrease marks the first ""negative growth"" since the end of the Great Recession in mid-2009. Economists had expected a weak 1.0 percent growth compared with the 3.1 percent annualized growth rate in the third quarter. The GDP downturn does not automatically signal a return to recession, which is loosely defined as two consecutive quarters of negative growth.

Negotiators in Washington face a dismal weekend leading up to -- and perhaps including -- New Year's Eve, made worse because they're trying to solve the wrong problem. They're wrangling over how to avoid the fiscal cliff when a series of laws aimed at or contributing to the nation's deficit are set to expire, complicated by Treasury Secretary Timothy Geithner's pronouncement the nation is approaching its debt ceiling.

Superstorm Sandy blew a hole not in the nation's labor market, but in economists' crystal balls as the economy added 146,000 jobs and the unemployment rate fell to 7.7 percent--the lowest level since December 2008, Bureau of Labor Statistics (BLS)reported Friday. Economists had forecast payroll growth of 93,000, down from 171,000 as originally reported for October, and an increase in the unemployment rate from 7.9 percent to 8.0 percent. While the drop in the unemployment rate was a positive sign, it was driven largely by a drop in the labor force.

The Real Estate Roundtable's survey of 110 industry leaders on commercial real estate changed little quarter-over-quarter, possibly due to uncertainty over how the next administration will impact economic policies. On a scale of 1-100, the sentiment index overall inched up to 65 in Q4, a 2 point increase from Q3. One survey participant said, ""Everyone is deferring business and investment decisions until after the election because they don't know what's going to happen.""

First time claims fell a surprising 27,000 to 365,000 for the week ended April 28, the Labor Department reported Thursday after revisions drove the prior week’s report up by 4,000 to 392,000, the highest level in five months. Economists had expected initial claims would decrease to 378,000.

The US economy grew at a disappointing 2.2 percent in the first quarter, the Bureau of Economic Analysis reported Friday, down from the 3.0 percent growth rate in the fourth quarter and below expectations. Economists had expected GDP to grow at 2.5 percent in the first quarter. In dollar terms, GDP increased $73.4 billion, most of which was an increase in personal consumption - $68.1 billion. A slowdown in government spending subtracted $19.0 billion, most of which was a $15.0 billion drop in federal spending in the first quarter from the fourth.

The analysts at Barclays Capital say a ""triple-dip"" in home prices will likely materialize by early next year. The term ""triple-dip"" emerged in a Clear Capital report a couple of weeks ago, and Barclays says its analysis corroborates the idea. The research firm warns that home prices will likely slip another 6 to 7 percent over the coming winter months. That would put median prices at a new low for this cycle, in fact 3 percent below the double-dip measurement of last spring.

Clear Capital has released its forecast for home prices heading into the first part of next year. The company says the market is flirting with a ""triple-dip"" by next spring. Last spring prices did a double-dip, dropping below this cycle's previous low point. While prices have ticked up in recent months, Clear Capital is projecting a drop of 1.6 percent over the last three months of this year, and another 3.2 percent by next April, moving prices dangerously close to the levels seen at the end of the first quarter of 2011.

Data released by Clear Capital Friday show home prices at the national level posted their first quarterly gain in June after nine months of declines. The company says the 0.9 percent increase is an encouraging sign that the markets are capable of positive price growth despite continued economic and foreclosure pressures. But even with the second-quarter uptick, U.S. home prices lost 3.2 percent during the first half of 2011, and Clear Capital is forecasting another 2.4 percent drop for the second half of the year.

Markets across the country are in full-fledged correction mode. That combined with the prevalence of foreclosures has analysts at the research firm Capital Economics convinced that the double dip in home prices will continue throughout this year. In fact, they say the structural factors that are constraining demand, such as higher down payment requirements, probably mean that prices won't rise consistently until 2014. Capital Economics expects up to three million foreclosed homes to make their way to the market over the next few years.