{"id":1484,"date":"2019-03-28T14:43:48","date_gmt":"2019-03-28T18:43:48","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1484"},"modified":"2019-03-28T14:43:48","modified_gmt":"2019-03-28T18:43:48","slug":"revised-fourth-quarter-gdp-february-pending-home-sales-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1484","title":{"rendered":"Revised Fourth Quarter GDP, February Pending Home Sales and Weekly Jobless Claims"},"content":{"rendered":"\n

KEY DATA:<\/strong> GDP: 2.2% (from 2.6%);\nAnnual: 2.9%\/ Pending Sales: -1%; Over-Year: -4.9%\/ Claims: -5,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cWe\u2019re back to trend growth, which really\nshould not surprise anyone.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  The economy expanded solidly last year, but\nwe could be looking at the end of near-3% growth.  Fourth quarter growth came in less than previously\ncalculated, as just about every component was revised downward.<\/em><\/strong>  The only positive revision was a narrowing of\nthe trade deficit. But it is looking like the slowdown that followed the 2015\nsurge may be nearly matched this year.  After\npeaking in the spring, we have had two consecutive quarters of decelerating\ngrowth and it is likely that we started off 2019 on an even slower note.<\/em><\/strong>  The tax cuts helped power growth last year,\nbut the positive effects looks like they lasted for a much shorter time than\nmost economists expected. <\/em><\/strong> I\nthought we would get a more moderate slowdown and it wouldn\u2019t be until this spring\nthat trend growth would be hit.  We are\nthere now. <\/p>\n\n\n\n

One segment of the economy that faltered last year\nwas housing and that weakness has been continued into this year.<\/em><\/strong>  The National Association of Realtors Pending\nHome Sales Index,<\/em><\/strong> which measures signed contracts not closings, fell\nagain in February.<\/em><\/strong>  The level\nseems to be stabilizing, but not at nearly the pace we saw before 2018 or even\nat the 2018 level.  Undoubtedly, the\nlimited supply is affecting sales rates, but we have complained about that for\nseveral years now, so don\u2019t expect it to change soon.  <\/p>\n\n\n\n

Jobless claims fell last week and are now back near\nhistorically low levels.<\/em><\/strong>  The\ncraziness of the winter weather and government shutdown may have finally washed\nout of the numbers.  <\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong> There really is no difference between 2.9%\nand 3%, given the margin of error in the estimates, so don\u2019t go using this\nnumber for any reason other than to say that growth was solid last year.  Still, you can only expand so fast and with\nlabor market growth limited and productivity weak, it was only a matter of time\nbefore we got back to trend growth.  <\/em><\/strong>The\nfourth quarter 2.2% number is pretty much at trend.  Investors and the Fed members need to get\ntheir heads around that likelihood.Comment on yesterday\u2019s January trade report: <\/em><\/strong> The\nmonthly trade deficit narrowed sharply in January and there are several\nexplanations for that shrinkage.  Some\nsay it was due to the tariffs, as imports from China fell sharply.  That is one likely reason, though I think it\nwas due to something else related to tariffs: Hopes that a traded agreement\nwould be concluded and the tariffs lifted. \nThat would have led importers to wait before landing their products in\nthe U.S.  That way, their goods would not\nbe subject to tariffs.  I expect imports\nfrom China to rise as we go through the next few months as the timing of a\npossible deal has become more uncertain. \nOf course, if it were mostly due to the weakening growth, that would be\nsomething to worry about.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: GDP: 2.2% (from 2.6%); Annual: 2.9%\/ Pending Sales: -1%; Over-Year: -4.9%\/ Claims: -5,000 IN A NUTSHELL:  \u201cWe\u2019re back to trend growth, which really should not surprise anyone.\u201d WHAT IT MEANS:  The economy expanded solidly last year, but we could be looking at the end of near-3% growth.  Fourth quarter growth came in less … Continue reading Revised Fourth Quarter GDP, February Pending Home Sales and Weekly Jobless Claims<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1484","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1484"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1484\/revisions"}],"predecessor-version":[{"id":1485,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1484\/revisions\/1485"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}