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The Economy

September 30, 2014 | Weekly Commentary

United States Gross Domestic Product according to the final estimate from the Commerce Department grew at a seasonally adjusted annual rate of 4.6 percent in the second quarter over the previous quarter.  This reflects a strong recovery from the harsh winter months.  The Federal Reserve projects real Gross Domestic Product to come in between 2.8 to 3.0 percent for 2014.

New Home Sales in the US rose 18% in August to 504 thousand homes, from the prior 427 thousand in July.  New home sales remain a bright spot in housing as builders are finding strong demand in higher end homes while other housing measures underperform.  Existing Home Sales decreased 1.80 percent in August and the Mortgage Bankers Association Mortgage Applications dropped 4.10 percent in the week ended September 20th.  The US House Price Index increased .10 percent in July as diminished demand remains a boon for real estate values.

US Manufacturing remained unchanged in September at 57.90 as manufacturing remains a strong driver for growth of US companies and households.  The Services Purchasing Managers Index decreased to 58.50 in September from 59.5 in August, but remains relatively strong.  According to the Thomson Reuters/University of Michigan’s US Consumer Sentiment rose to 84.6 in September from 82.5 in August.  A stronger consumer should bolster earnings growth and economic activity.

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