Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=173798
Story Retrieval Date: 12/11/2013 9:25:10 PM CST
The state of the economy? Meh.
A string of economic indicators released this week show just how uneven the recovery is, with the U.S. economy growing more than originally reported in the third quarter due to stronger consumer spending, while existing home sales last month fell more than expected.
Gross domestic product, the sum of all goods and services produced in the U.S., expanded at an upwardly revised 2.5 percent annual rate in the third quarter, more than Bloomberg’s consensus estimate of 2.4 percent rate and the 1.7 percent growth rate in the second quarter. The Commerce Department originally reported growth of 2 percent for the July-to-September quarter.
Consumer spending and exports both saw stronger gains than originally reported and American business provided another upbeat sign, with corporate profits increasing $44.4 billion, following a $47.5-billion rise in the second quarter.
Similarly, the monthly assessment of 85 economic indicators by the Federal Reserve Bank of Chicago found a slight uptick in economic activity in October. The National Activity Index improved to -0.28 from September’s -0.52 due to increases in production, employment, and sales.
“The fact that things in October have begun to look a little bit better, to me that suggests we are not going to head into a double dip [recession],” said Adolfo Laurenti, deputy chief economist at Mesirow Financial in Chicago. But, he added, the economy wasn’t improving enough “to gain steam.”
Housing remains a sore spot. In October, sales of existing homes dropped 2.2 percent, more than estimated, as credit tightened and foreclosures were temporarily halted by many lenders.
The annual rate of existing home purchases in October stood at 4.43 million, down from September’s 4.53 million and less than Bloomberg’s estimate of 4.48 million. Housing inventory fell 3.4 percent in October, but still left more than a 10-month supply of unsold houses on the market, a scant decrease from September.
In the Midwest, existing home sales fell 1.1 percent in October. The median price dropped to $139,500, more than 3.5 percent lower than the same month a year ago.