Economy Watch: US GDP Expands Modestly
By Dees Stribling, Contributing Editor
The Bureau of Economic Analysis reported on Friday that U.S. GDP grew at an annualized rate of 2.5 percent during the first quarter of 2013. That’s still a preliminary estimate, and considerably better than the fourth quarter’s real GDP growth of an annualized 0.4 percent, but not as strong as expected.
The growth in real GDP in the first quarter reflected an upturn in private inventory investment (businesses buying things) an acceleration in personal consumption (people buying things), an upturn in exports, plus a smaller decrease in federal government spending (but not an increase). These increases were partly offset by an upturn in imports, which is a subtraction from GDP, and a deceleration in CRE investment.
CRE investment (nonresidential structure investment, in BEA parlance) wasn’t down by much, but it did come in at an annualized decline of 0.3 percent during the first quarter. That compares with annualized growth for the sector of 16.7 percent during the fourth quarter of 2013, one of the factors that kept the economy growing at all.
Home values continue to rise in Q1
Zillow reported on Thursday that U.S. home values increased 0.5 percent in the first quarter of 2013 compared with the fourth quarter of 2012. That marks the fifth consecutive quarter that residential prices have gone up, though the rate of increase has slowed down a bit.
Some housing markets didn’t see much appreciation during 1Q13, however, and others even lost ground. Metro Washington, D.C., and Boston barely eked out a quarterly gain, up 1.2 percent and 0.8 percent, respectively. Greater Baltimore broken even for the quarter, while Chicago was down 1.4 percent and St. Louis lost 1.2 percent. Charlotte, N.C.; Cincinnati; New York; Philadelphia; and Pittsburgh all lost less than 1 percent in valuation in the first quarter.
On an annual basis, the Zillow Home Value Index rose 5.1 percent since March 2012. While home values are still experiencing above normal annual appreciation, the real estate pricing specialist notes signs of deceleration. Monthly appreciation, while still positive, has been continuously getting smaller, and national home values grew by only 0.1 percent for the past two months, according to Zillow.
Unemployment claims dip
For the week ending April 20, initial unemployment claims were 339,000, an unexpected decrease of 16,000 from the previous week, the Bureau of Labor Statistics reported on Thursday. The less jittery four-week moving average was 357,500, a decrease of 4,500 from the previous.
Wall Street moved up again on Thursday, with the Dow Jones Industrial Average rising 24.5 points, or 0.17 percent. The S&P500 gained 0.4 percent and the Nasdaq advanced 0.62 percent.