Third Quarter GDP rose by 2.9%, October Consumer Sentiment declined to 87.2,Homeownership rates at lows not seen since 1965
October 28, 2016
The government reported that the first reading on third quarter GDP rose by 2.9%, above the 2.5% expected and well above the anemic 1.4% in the second quarter and 0.8% in the first quarter. The 2.9% was the fastest pace in two years. However, all was not rosy within the report. When dissecting the numbers it showed that the consumer spending component grew by 2.1%, well below the 4.3% in the second quarter. In addition, corporate investment on equipment fell for the fourth straight quarter, the longest stretch since the end of the Great Recession in mid-2009. Residential investment also declined. The GDP’s inflation gauge was near unchanged.
The final reading for October Consumer Sentiment declined from the initial reading and down from September to the lowest level since October 2014. The Consumer Sentiment Index hit 87.2 in October, below the 88.2 expected and down from 91.2 in September. Americans grew less favorable for the national economy in October, with half of those surveyed feeling that the U.S. economy will experience an economic downturn within the next five years.
Homeownership rates in the U.S. remain near lows not seen since 1965 as the industry awaits a spike of new homeowners from the the millennial generation. The U.S. Census Bureau reported this week that the homeownership rate rose to 63.5%, up from 62.9% in the second quarter. The all-time high was 69.2% back in 2004.