Tag Archives: U.S. Economy

Q2's real GDP growth is consistent with the positive news for most housing metrics as of late. Existing home sales are at pre-recession levels, and in the July 2015 pending home sales report released Thursday by the National Association of Realtors (NAR), pending home sales were up by 7.4 percent year-over-year. Affordability and tight inventory remain obstacles to home sales, however.

Included in the inaugural edition of Economy Matters post is a piece examining how Atlanta Fed president Dennis Lockhart prepares for the Federal Open Market Committee (FOMC) and his experience with the Committee, which is scheduled to meet again in September.

The Philadelphia Fed reported that the labor market outlook remains unchanged. The forecasters predicted similar results as the last survey for unemployment, noting that it will be an annual average of 5.3 percent in 2015, before falling to 5.0 percent in 2016, 4.8 percent in 2017, and 4.7 percent in 2018.

Although this increase may seem marginal, this one point rise up places the market closer to the one point goal, indicating that it has returned to normal. In addition, 66 percent of markets have shown improvement year-over-year.

The nation's real gross domestic product (GDP) bounced back from a dismal first quarter with an annual growth rate of 2.3 percent in the "advance" estimate for Q2 released Thursday by the Bureau of Economic Analysis (BEA).

Among the bills that passed in the Committee were H.R. 2243, the Equity in Government Compensation Act of 2015, which was introduced in May by Ed Royce (R-California). The bill passed by a vote of 57-1.

The Committee also determined that labor market indicators found that underutilization of labor resources have diminished slightly, and growth in household spending has been moderate, while the housing sector showed some improvement. However, business fixed investment and net export remained soft.

Wallison presented a chart that compared recovery from the financial crisis of 2008 with that of previous crises and noted that from 2009 until the passage of Dodd-Frank in July 2010, economic recovery was on the same pace as previous recoveries. He contended that recovery began to slow down when Dodd-Frank was signed into law.

"Almost all of our contacts noted a seasonal increase in their residential mortgage business, which was heavily weighted toward new-home purchases," the Fed wrote. "The rapid rise in rental rates was cited as a motivating factor to purchase homes. Little change was reported in delinquencies (already at low levels) and loan-application standards."

Rosengren said slack in the labor market, or excess supply, may exist despite the recent decline of the unemployment rate to 5.3 percent, which may be a reason why the inflation rate remains subdued. The employment-to-population ratio may be evidence of slack in the labor market, though some of the slack can be attributed to changes in demographics, according to the Boston Fed.