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09-22-10 economist report. Summer Recap. Summer Recap. Economic standstill. Expiration of first time homebuyer tax credit led to 27.2% drop in July home sales. Fear of a double-dip recession. Frustrated economists and investors predicted very slow growth.
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Summer Recap • Economic standstill. • Expiration of first time homebuyer tax credit led to 27.2% drop in July home sales. • Fear of a double-dip recession. • Frustrated economists and investors predicted very slow growth. • Federal Reserve warned recovery may take up to 6 more years. • Some positive signs (i.e. August 26 jobless claims of 473,000, which were 22,000 fewer than expected).
Recent Developments • Positive housing starts report for August. • Rose 10.5%, crushing the estimate of 0.7% growth. • Still “astoundingly weak” –Paul Dales • Much of this gain came from the more volatile multi-family homes (apartments, condos, etc.), which many consider less important than single-family homes (4.3%).
Recent Developments • FOMC Meeting • Federal Open Market Committee met yesterday (09-21-10). • Worried about low inflation. • Lack of action likely tied to political situation. • Committee hinted that November meeting could be more decisive.
Recent Developments • Keeping an eye on unemployment. • Recession officially over . • Most people feel true recovery impossible until we bring down the high rate of unemployment. • Unemployment =lagging indicator.
Coming up… • Existing home sales: September 23. • Durable goods orders: September 24. • Consumer confidence: September 28. • Final revised report of Quarter 2 GDP: September 30. • Political situation.