Economy Watch: GDP Revised Upward
- Dec 22, 2010
December 22, 2010
By Dees Stribling, Contributing Editor
U.S. GDP increased at an annualized rate of 2.6 percent in the third quarter of 2010, according to a revised estimate released by the Bureau of Economic Analysis. The previous estimate was 2 percent for the third quarter.
A number of factors contributed to the strengthening of the economy during the quarter. “Personal consumption expenditures,” as the BEA puts it, were up — all those shoppers out shopping in late summer and early fall — as was private inventory investment, exports and federal government spending. The main negatives for the third quarter U.S. GDP came from the residential real estate market, which is fast becoming the ball-and-chain of the economy, and imports, which count as a subtraction in the calculation of GDP.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.8 percent in the third quarter, according to the BEA, the same as in the preliminary estimate. Excluding food and energy prices (but who can live without food and energy?) the price index increased 0.6 percent in the third quarter.
Existing Homes Sales Rise in November
After a drop in October, the National Association of Realtors has reported that existing home sales of all kinds of rose in November to an annualized rate of 4.68 million. That represents a 5.6 percent month-over-month increase.
Sales during November 2010 were 27.9 percent lower than during the same month last year, but that’s hardly an apt comparison, since the market was under the steroid-like influence of the homebuyer tax credit at the time. The national median existing-home price for all housing types was $170,600 in November, up 0.4 percent from the same month in 2009.
“Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” Lawrence Yun, the NAR’s chief economist, said in a statement. “The market is recovering and we should trend up to a healthy, sustainable level in 2011.”
Holiday Shopping Has Some Zip
Retailers are poised to have their best Christmas season since before hard times hit. Chain-store sales rose 4.2 percent during the week ended Dec. 18 compared with the same period in 2009, according to the latest survey by the International Council of Shopping Centers and Goldman Sachs, released Tuesday.
Sales for Dec. 18 itself–the last Saturday before Christmas, called Super Saturday by retailers–saw a 15 percent spike compared with the same day in 2009, according to ShopperTrak. Last year, retailers had a more of a Lousy Saturday on the Saturday before Christmas, with sales down 16.5 percent compared with the same day in 2008.
Wall Street had an up day on Tuesday, with the Dow Jones Industrial Average gaining 55.03 points, or 0.48 percent. The S&P 500 advanced 0.6 percent and the Nasdaq trended positive by 0.68 percent.