Unemployment Insurance

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights unemployment insurance and GDP growth.

• The number of people filing for unemployment insurance fell for the very first time to 364,000 in the latest week.  It marks the second consecutive week of being well below the critical 400,000 weekly pace.  That suggests that monthly net new job gains could be in excess of 150,000, which will be released in separate data in early January.   This data is some of the most timely information about the current state of the economy, with very little lag time.
• Meanwhile, GDP growth for the third quarter was revised down.  The economy was expanding only by 1.8 percent.  This is below the historical average growth rate in the U.S. of about 3 percent and the stronger post-recession growth of 4 to 5 percent.  But this data has a longer lag time and is in essence a look deeper into the rearview mirror.  I expect GDP growth in the fourth quarter to show 2.5 to 3.0 percent, when the data gets released in late January.
• Separately, consumer sentiment is bouncing back nicely.  The University of Michigan survey of consumers had the index value rising to 69.9 in December from 64.1 in November.
• Based on the latest economic data, the recent improvements on existing home sales and housing starts may continue in the upcoming months.