Final Economic Update of the Decade!

by on January 4, 2010

It’s a mixed bag!

Existing home sales rose 7.4% in November to a seasonally adjusted annual rate of 6.54 million units from 6.09 million units in October. On a year-over-year basis, sales of existing homes increased 44%, the largest gain on record. The inventory of unsold homes on the market fell 1.3% to 3.52 million, a 6.5-month supply at the current sales pace, and the lowest level since December 2006, which is all good!

The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2.2% in the third quarter of 2009. This is another indicator that things are improving.

The Commerce Department reported that consumer spending rose 0.5% in November, slightly less than economists had anticipated. Personal income increased 0.4%, the fastest pace in six months. Still more good news.

The Reuters/University of Michigan consumer sentiment index for December’s final reading rose to 72.5 from November’s final reading of 67.4. Economists had forecast a December reading of 73.8.

The Commerce Department reported new home sales fell 11% in November to a seasonally adjusted annual rate of 355,000 from a downwardly revised rate of 400,000 in October. Economists had expected a pace of 440,000. Not so good news.

What does this mean for the average person? It means that if you are a home owner, your properties value increased by a modest amount in Nov./Dec.

If you were thinking of purchasing a new home, you decided to hold off, perhaps because you are concerned about your job or because interest rates have been inching up. Either way, this was bad news for developers.

Overall, the economy continues to show signs of recovery which is good for every one.

Happy New Year!

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