While we are still grappling with the delays from October’s government shutdown, the estimates for third quarter economic output show much of the same. Gross domestic product rose at an annual rate of 2.9 percent in the third quarter, on the heels of a 2.5 percent rise in the second quarter. While the acceleration in the economic pace is welcome, most of it was boosted by inventory adjustment.
All main GDP components—consumers, businesses, government and trade—were positive contributors to third quarter growth. Consumer spending gained 1.5 percent, driven by a 4.3 percent rise in consumption of goods. Businesses approached investments with a cautious outlook in the third quarter, as the specter of budget wrangling in Washington and the possibility of a government shutdown loomed large. Nonresidential fixed investments rose at an annual rate of 1.6 percent. Business spending on buildings jumped 12.3 percent in the third quarter, on the heels of a 17.6 percent gain during the second quarter. The noticeable advances point to a strengthening pipeline of commercial developments, as market fundamentals continue to improve.
While the summer season was in full swing, economic performance during the third quarter of the year accelerated, based on initial estimates from the Bureau of Economic Analysis. The main measure of economic activity—gross domestic product—rose at an annual rate of 2.9 percent. The boost came from upward inventory adjustments. Consumer spending was positive, buoyed by spending on travel and leisure, recreation and home purchases and furnishing. Business spending was cautious, as the specter of a government shutdown loomed large. Net exports were positive to the tune of $44.8 billion for the quarter. And with stronger balance sheets, state and local governments upped their spending, overcoming the federal government’s negative contribution to GDP.
The second quarter marked a noticeable improvement in the recovery trajectory of commercial REALTOR® markets. Based on the results of the July Commercial Real Estate Market Survey, commercial practitioners reported solid leasing activity and a double digit rise in sales volume. Nationally, 60 percent of REALTORS® reported completing a sales transaction during the quarter.
The recovery in commercial REALTOR® markets notched a noticeable gain during the first quarter 2013, as sales and leasing activity advanced. Based on the results of the May Commercial Real Estate Market Survey, commercial practitioners reported a solid start to the year. REALTORS® rated the direction of commercial business opportunities 4.0 percent higher from the fourth quarter 2012, in the wake of a 6.0 percent rise from the third quarter of last year.
Economic activity maintained grew at a steady pace during the first quarter of the year, as consumers and businesses focused on the year ahead. Gross domestic product rose 2.4 percent in the first quarter, as consumers opened up their wallets at the fastest pace since the fourth quarter 2010. Consumer spending increased 3.4 percent in the first quarter, lifted by a 9.1 rise in auto purchases, coupled with an equal advance in sales of recreational goods and vehicles.
With aging vehicles and with manufacturers rolling out technologically advanced and more fuel efficient new models, consumers are finding new cars attractive. Sales of cars in April totaled 651,644 units, a 3.1 percent increase year-over-year. Sales of light-duty trucks, which include SUVs, advanced 14.7 percent, benefiting from the soaring popularity of car-based cross-over vehicles, which recorded the strongest yearly gain in April, at 16.5 percent. Pick-up trucks also recorded solid sales growth, with the Ford F-Series leading the sales charts, followed by the Chevrolet Silverado.