Q2 GDP rose, Employment Cost Index rose in Q2, Home sellers hit their highest point in a decade
July 28, 2017
The first reading on 2017 Q2 Gross Domestic Product (GDP) rose 2.6% from 1.2% in Q1 bolstered by a 2.8% increase in consumer spending and a 0.7% rise in government spending. The first quarter was revised lower to 1.2% from 1.4%. In addition, investment in new housing declined 6.8%. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
The inflation-reading Employment Cost Index rose 0.5% in Q2, from 0.6% in Q1, and measures workers’ wages and benefits. From a year earlier, total compensation rose 2.4%, while wages were up 2.3% from a year ago. The lack of wage growth continues to be a tailwind for low interest rates. If wages don’t grow, inflation typically remains stagnant, which has been the case for quite some time.
AATOM Data Solutions reported this week profits for home sellers hit their highest point in a decade, due to a continued rise in home prices. In the second quarter of 2017, homeowners who sold their homes saw an average gain of $51,000, the highest since the second quarter of 2007 when owners saw gains of $57,000. The $51,000 was an increase of 26, the highest return average since the third quarter of 2007’s 27%.