Daily News 5-29-2015
May 29, 2015
Friday – May 29
U.S. economic growth in the first quarter of this year fell into negative territory, due in part to the West coast port strike, harsh winter weather, along with a widening trade deficit. The Bureau of Economic Analysis reported on Friday that the second estimate for Gross Domestic Product (GDP) fell by 0.7% in the first quarter, below the 0.2% that was originally reported. Current incoming data suggests a pick up in economic growth in the second quarter, but the number remains near the anemic 1% mark. GDP measures the value of the production of goods and services.
A report out on consumers’ assessments of the U.S. economy soured in May and fell to the lowest level in 2015. Consumer Sentiment declined to 90.7 in May, below the 95.9 in April after hitting the highest level since 2004 back in January of 98.1. Slow wage growth, along with many Americans working part time have put a crimp in Americans attitudes towards the U.S. economy. Stagnant wage growth leads to reluctance in consumer spending in addition to holding off on purchasing homes.
The New York Federal Reserve Bank released its 2015 Housing Survey this week revealing that U.S. households, on average, expect home price growth to continue at a 4.4% pace over the next year. The survey also showed that respondents expect home loan rates to increase in coming years, but at a moderate rate. In addition, renters report that they would rather own than rent if they had the financial resources. Many renters feel that a mortgage would be hard to obtain, although responses suggest a slight easing in perceived credit access.