Economy Watch: US GDP Saw Small Growth in 4Q
- Mar 29, 2013
The Bureau of Economic Analysis reported its final estimate for the nation’s GDP for the fourth quarter of 2012: an annualized growth of 0.4 percent. That’s up from an initial estimate of a contraction of 0.1 percent, which was later revised to an expansion of 0.1 percent, but still tepid growth.
One drag on growth was a drop in private inventories, which knocked 1.52 percentage points off the total. Government spending in this new age of austerity subtracted 1.41 percentage points from U.S. GDP during the quarter. Inventories might bounce back during the first quarter, but government spending is unlikely to, especially if the sequester stays in place.
Residential investment—the housing market, in other words—added roughly 0.4 percentage points to the total. In previous years, in fact as long ago as 2006, housing proved itself a major drag on the economy, slicing nearly 1.5 percentage points from growth in some quarters, only turning around in late 2011 (except for the artificial high of the homebuyer tax credit).
Zombie houses dot the land (Especially in Florida)
RealtyTrac reported on Thursday that there are roughly 301,800 “zombie” residential properties nationwide. This troubling hangover from the housing crash includes homes technically in foreclosure, and from which their former residents have left—but which their lenders haven’t disposed of, either through inertia, or while waiting for prices to go up.
This is a new kind of report for the foreclosure data specialist, and points to the depth of the little-known problem. Still being the technical owner of a house in foreclosure limbo can ensnare former residents—who left in the first place because they couldn’t pay for the house—with unpaid tax bills, and assessments from municipalities for code violations or even demolition charges.
Florida has the most zombie properties, according to Realty Trac, with 90,556 vacant homes in foreclosure. Illinois and California were next on the doleful list, with about 31,600 and 28,800 zombie properties respectively.
Unemployment claims see uptick
The U.S. Department of Labor said that for the week ending March 23, initial unemployment claims were 357,000, an increase of 16,000 from the previous week’s revised figure of 341,000. The more stable four-week moving average was 343,000, an increase of 2,250 from the previous week’s total.
Wall Street was chipper again on Thursday, with the Dow Jones Industrial Average up 52.38 points, or 0.36 percent, while the Nasdaq gained 0.34 percent. The S&P was up 0.41 percent, enough to take it to a record high.