GDP 3rdQ2015

- Real GDP quarter/quarter seasonally adjusted, annualized +1.5%. Previous was +3.9%

- GDP price index quarter/quarter seasonally adjusted, annualized  +1.2%. Previous was +2.1%.

GDP is the broadest indicator of the U.S. economy.  This is a weak report.  Worse yet this is the state of the economy after enormous efforts in monetary policy by the Fed (3xQE and ZIRP)

and significant deficit spending. The Fed's words of yesterday that "economic activity has been expanding at a moderate pace" seem hollow.  The Fed is in a very difficult spot.  While its charter is low unemployment and low inflation - both of which have been met - the nasty fact is that +1.5% GDP growth is too slow.  The Federal government needs something closer to 4.0% growth to come close to meeting the obligations imposed by the National Deficit and the future obligations of Medicare and Social Security.  Also, while we may have low unemployment we have low Labor Participation Rate.

This reminds me of a rubber stamp the nuns used to put on any work they did not like.  It read "Must Do Better."

A detailed analysis of GDP by Rick Davis of Consumer Metrics Institute will be in my newsletter of tomorrow.

 

 

Initial Jobless Claims (week ended 10/24/2015)

- New Claims seasonally adjusted 260,000. Previous was 259,000

- New Claims, unadjusted, totaled 245,153 an increase of 12,433 from previous - 4-week Average  259,250.  Previous was 263,250.

While the is good it misses the fact that the majority of the dynamics of the jobs market do not involve layoffs of workers eligible for unemployment.

 

Pending Home Sales Index  (September 2015)

- Pending Home Sales Index - Level 106.8. Previous was 109.3

- Pending Home Sales Index month/month change -2.3%. Previous was -1.4%.

Home Sales are declining. Why?  Flat economy, tougher mortgage qualifying, higher prices, student loan debt, lack of confidence in income stability - take your pick.