Jobless Claims, GDP | Pound Ridge Real Estate

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and GDP.

• The drop in claims for unemployment insurance for the week ending June 23 and the double-digit growth in residential investment in 2012 Q1 is good news for the real estate market.
• The employment situation appears to be poised for some modest gains, based on the initial claims for unemployment insurance filed for the week ending June 23. Initial claims for unemployment insurance dropped to 386,000 from the revised (upward) estimate of 392,000 the previous week.
• The 4-week moving average, which is less volatile, declined to about 387,000. Despite this week’s gains, the level of jobless claims remains high, especially compared to first quarter levels when claims hit a low of about 363,000. Still, the economy is expected to generate at least 1 million jobs in 2012, which is a potential market of homebuyers.
• The economy, as measured by GDP, grew at a slower pace of 1.9 percent in Q1 of 2012 (3rd estimate) compared to 3.0 percent in Q4 of 2011. Although GDP growth slowed overall, the good news is that residential investment rose sharply at 20 percent, the second quarter of double digit growth after Q4 2011 growth of 11.6 percent.
• The pickup in residential investment is indicative of positive investor expectations that future housing demand is expected to further increase in the future.
• The housing market, as seen by many indicators released by NAR such as existing home sales, pending home sales, and the REALTORS® Confidence Index (RCI), is certainly recovering.
• Greater investment now should ease up the tight inventory situation in the coming months.

Scholastica (Gay) Cororaton, Research Economist

Tagged with: GDP • jobless claims