Elliott D. Pollack & Co.
The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
Real GDP (the output of goods and services produced by labor and property in the U.S.) increased at a 2.7% annual rate in the third quarter. This was in line with expectations. In the second quarter, real GDP increased by 1.3%. The acceleration in real GDP in the third quarter reflected upturns in private inventory investment and in federal government spending, a deceleration in imports, an acceleration in residential fixed investment and a smaller decrease in state and local government spending. Personal income and disposable personal income both grew by less than 0.1% in October compared to September. Personal consumption expenditures decreased by 0.2%. October’s results reflect the effects of Hurricane Sandy, which made landfall on October 29. The storm affected 24 states, with particularly severe damage in New York and New Jersey. The U.S. personal savings rate (disposable personal income less personal outlays as a percent of personal income) was 3.4% in October compared to 3.3% in September.
The Conference Board index of consumer confidence inched up in November to 73.7. This was also in line with expectations. The confidence index is up from 55.2 year over year. Initial claims for unemployment insurance declined last week to 393,000. While this is still high, it is an improvement over the last two weeks of data.
Corporate profits in the third quarter increased by $67.3 billion. This compared to an increase of $21.8 billion in the second quarter. Manufacturers’ new orders for durable goods were essentially flat in October compared to September. New orders are up 2.3% over a year ago.
Housing continues to improve. While new home sales were about flat with last month (Oct/Sept), they stand 17.2% above a year ago. The National Association of Realtors pending home sales index increased in October to 104.8 compared to 99.6 last month and 92.6 last year. The Case-Shiller home price index for 20 cities was up 3.0% over a year ago. At least the declines seem to have stopped.
As for Phoenix, Case-Shiller shows prices up 20.4% over a year ago and up 1.1% for the month. Newly released data also shows that total personal income in the Phoenix metro area increased by 2.0% in 2010 over 2009 and 5.3% in 2011 vs. 2010. Arizona weekly unemployment claims continue to decrease.
This is good news. Overall, it is slow but steady. If the leadership in Washington doesn’t drive us off the fiscal cliff, we should expect a continuation of slow growth.
