More Economic News...
Posted by Bruce W. Woolpert on Mar 18, 2015
Economists were pleased with the report that the Gross Domestic Product (GDP) rose 2.5% in the Third Quarter. The report allayed at least for now concerns that the economy is sliding toward recession. The economy grew a paltry 0.4% in the First Quarter and 1.3% in the Second Quarter.
Among the components of GDP, consumer spending grew at an annualized 2.4% after increasing only 0.7% in the second quarter. Business investment was strong. Spending on equipment and software increased 17%. Exports also contributed to stronger economic growth. Higher consumer spending was not expected because consumer confidence fell to 39.8% in October to the lowest level since March 2009. According to the consumer survey conducted by the Conference Board, consumers are worried about business conditions and their income expectations.
Sales of new homes achieved a stronger than expected gain in September. Sales rose 5.7% to 313,000 units on an annualized basis. Months‘ supply of unsold homes fell from 6.6 to 6.2 months, and new home inventories were flat. New home sales were stronger in only some geographic areas. Existing home sales fell 0.9% compared with last year.
Orders for U.S. durable goods other than transportation equipment rose in September by the most in six months. Demand for goods meant to last at least three years, excluding airplanes and automobiles, rose 2.4%.
Economists say that, while higher economic growth will help ensure that the economy does not slip back into recession, the growth rate is not high enough to lower the unemployment rate.
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