Economist's Commentary: August 28, 2008

Quick Take on the Economy: August 28, 2008

By Harika "Anna" Barlett, Senior Research Analyst, NAR Research

Real Gross Domestic Product (GDP) increased at an annual rate of 3.3 percent from the first to the second quarter in the second reading on the economy with more updated data. This was a much better-than-expected upward revision from the first reading of an increase of 1.9 percent.
The upward revision to the GDP was primarily due to upward revisions to exports and private inventory investment, and downward revision to imports. Exports are keeping the U.S. economy out of recession.
Additionally, increases in personal consumption expenditures, government spending, and nonresidential structures made positive contributions.

The number of initial jobless claims fell last week for the third week in a row. The Labor Department announced that the advance figure for seasonally adjusted initial claims was 425,000, a decrease of 10,000 from the previous week's revised figure of 435,000. The four-week moving average also decreased by 6,000 to 440,250.
Although the jobless claims number is still above 400,000, which is an indicator of a weak labor market, the movement in job loss number has been in the right direction for the third week now, down from the peak observed in the first week of August.
Continuing unemployment claims increased by 64,000 to 3.423 million, pointing to a somewhat longer time it is taking to find new employment.

The weak dollar continues to help increase exports and decrease imports. Tax rebate checks helped consumers a bit. The economy is quite resilient.
Higher than expected economic growth might help with consumer and business confidence. Jobs could take a turn for the better later in the year.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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