Tag Archives: GDP

So, there's some sort of football game this weekend. Like many economists, I’m a bigger baseball fan than football, intrigued by the statistics in baseball, statistically a zero-sum game unlike most other sports. Just about every positive statistic in baseball for one player has a corresponding negative statistic for another.

With a nod to the report the nation’s economy had contracted in the fourth quarter, the Federal Open Market Committee (FOMC) voted Wednesday to continue its program of purchasing $40 million a month of mortgage-backed securities (MBS) and to maintain the target Fed Funds rate at 0 to 0.25 percent.

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.

Two housing reports in the week just demonstrated, yet again, economists are not infallible. On Tuesday, the National Association of Realtors (NAR) reported existing home sales for December: 4.94 million against a consensus forecast of 5.1 million. Then on Friday, the Census Bureau and HUD reported jointly 369,000 new homes were sold in December compared with a consensus forecast of 388,000. There are several important housing related reports due out next week, but they will take a backseat to the report on fourth quarter GDP and Friday's report on the employment situation.

Personal income jumped 0.6 percent in November--twice what economists forecast--improving $85.8 billion, while spending rose a hefty 0.4 percent, the Bureau of Economic Analysis. The growth in spending matched economists’ forecasts.

Real GDP growth for the third quarter was revised up again, the Bureau of Economic Analysis reported Thursday, reaching a 3.1 percent annualized growth rate. It was only the third time in the last five years the quarterly growth rate topped 3.0 percent. Economists had forecast a 2.8 percent growth.

After rising in the third quarter, overall economic growth is expected to decline this quarter and in early 2013, according to Fannie Mae. However, the GSE anticipates further strengthening in the housing market. Economists at Fannie Mae anticipate economic growth of less than 2 percent for the first half of 2013 followed by more accelerated growth for the remainder of the year. Fannie Mae anticipates a 7.5 percent rise in home sales over the course of 2013 after this year's 10.2 percent increase.

As household formation mends and grows, the housing recovery will benefit overall, but the rental industry is expected to come out as the biggest winner, according to a report from Capital Economics. ""[W]ith the overwhelming majority of newly forming households over the next few years set to rent rather than own their home, the rental sector will be the disproportionate beneficiary,"" wrote economist Paul Diggle in the report. The analytics firm expects household formation to soon meet or exceed the rate of 1.1 million per year.

Real GDP growth for the third quarter was revised up significantly, the Bureau of Economic Analysis reported Thursday, reaching a 2.7 percent annualized growth. Economists had forecast a 2.8 percent growth rate. The report on GDP was the second of three monthly reports and billed as the ""second estimate."" The report on profits was the first of two and labeled ""preliminary."" Final reports on both will be released December 20.

Given improvements seen in housing, Fannie Mae revised its housing forecast higher for 2012 and 2013 in its November economic outlook report. The GSE's Economic & Strategic Research Group anticipates single-family housing starts will jump 25 percent this year, then rise by another 22 percent in 2013. Existing-home sales should also rise and see a 9 percent increase in 2012 and a 4 percent gain in 2013. Even though reports on the housing sector give reasons to be optimistic, Fannie Mae still warned ""data continue to show a sluggish recovery overall.""