Economic Indicators, Stock Market & Investment Reports


Third-Quarter U.S. Economic Growth Revised Lower

The U.S. economy grew at slower pace in the third quarter than initially reported as weak consumer spending and rising imports softened the effect of stimulus efforts. The revised numbers suggested that growth going forward would be slow.

The nation’s gross domestic product rose at an annual rate of 2.8 percent in the third quarter, compared with a contraction of 0.7% in the prior quarter, the Commerce Department reported Tuesday. The revised GDP falls short of the 3.5 percent originally estimated last month. Compared with a year ago, real GDP is down 2.5%.

Even though growth was slower, the third quarter probably marked the end of the longest recession since World War II, with the economy expanding for the first time in a year. The report does not mark the official end of the recession, though. That determination will be made by the National Bureau of Economic Research, likely sometime in 2010 once all the various economic readings have had their final revisions.

Much of the growth can be attributed to the billions of dollars the federal government has pumped into the economy as it seeks to mitigate the effects of a deep recession. But the nation is still grappling with the highest unemployment rate in 26 years, hampering efforts to persuade consumers to open their wallets again.

Consumer spending in the third quarter increased 2.9 percent, falling short of the 3.4 percent it reported last month. Economists said it was below healthy margins and lower than the levels seen in 1983, when unemployment was equally high. Consumer spending makes up about 70 percent of the economy. Households continue to struggle with damage balance sheets and lingering labor market weakness.



Record High of U.S. Mortgage Delinquencies in Third Quarter

More homeowners than ever are having trouble making their monthly mortgage payments, according to figures released Thursday. The figures underlined the level of stress on a large segment of the country, a situation that could put out the modest recovery in home prices over the last few months and impede any economic rebound.

The overall third-quarter delinquency rate is the highest since the association began keeping records in 1972. Nearly one in 10 homeowners with mortgages was at least one payment behind in the third quarter, the Mortgage Bankers Association said in its survey. It is up from about one in 14 mortgage holders in the third quarter of 2008.

The combined percentage of those in foreclosure as well as delinquent homeowners is 14.41 percent, or about one in seven mortgage holders. Mortgages with problems are concentrated in four states: California, Florida, Arizona and Nevada.

In the first stage of the housing collapse, defaults and foreclosures were driven by subprime loans. As the subprime tide recedes, high-quality prime loans with fixed rates make up the largest share of new foreclosures. A third of the new foreclosures begun in the third quarter were this type of loan, traditionally considered the safest. Without jobs, borrowers usually cannot pay their mortgages.

In previous recessions, homeowners who lost their jobs could sell the house and move somewhere with better prospects, or at least a cheaper cost of living. This time around, many of the unemployed are finding that the value of their property is less than they owe.


U.S. leading indicators rose for 7th consecutive in Oct

U.S. leading economic indicators index rose for the seventh consecutive month in October, signaling the U.S. recovery is in place. The leading indicators rose 0.3% in October after an un-revised 1% gain in September, the Conference Board reported Thursday.

Six of the 10 indicators were positive. The index is up at a 10.2% annual pace in the last six months. The index of coincident indicators was unchanged in October after a 0.1% decline in September. The coincident index has been essentially flat since June


U.S. Unemployment Rate Hits 26 Year High in October

The U.S. unemployment surged to hit its highest level in more than 26 years as employers cut more jobs in October. The unemployment rate rose by 0.4 percentage point to 10.2%, a sign the labor market continues to struggle as the economy emerges from its deep recession. The unemployment rate of 10.2% was the highest since April 1983.

The economy lost another 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million.

Despite the apparent end of the Great Recession, economic expansion has yet to translate into jobs, leaving tens of millions of people still struggling.

The pace of job loss continued to taper off in October, the precursor to eventual growth. Amid the paralyzing fear between November 2008 and April 2009 the economy shed an average of 645,000 jobs a month. The pace dropped to an average monthly loss of 357,000 jobs between May and July. And over the last three reports, average monthly job losses have slipped to 188,000.

Some experts see that as the economy expands, companies will use fresh profits to add to payrolls as they reach for increased sales. As workers spend their paychecks, they will create opportunities for other businesses, generating more jobs. But some doubt whether recent trends of a 3.5 percent annualized rate economy growth can continue, absent another dose of government spending.

News that the nation's unemployment rate rose above 10 percent last month didn't derail the stock market's strong gains in the week, which lifted major indexes more than 3 percent. The bad economic news reassured some investors that the Federal Reserve will have to hold interest rates low for some time.

Low interest rates tend to weaken demand for the dollar, which in turn gives a boost to stocks. When the dollar is weaker, U.S. goods are cheaper for buyers overseas. Companies that do business overseas also get a profit gain when their earnings are translated back into dollars.