Q3 GDP & Housing Revisions Expose Considerable Double Dip Risk
Significant downward revisions to earlier estimates of both third quarter US Gross Domestic Product and recent months' New Home Sales (which are by far greater drivers of economic growth compared to their Existing Home Sales counterpart), expose that the threat of a Double Dip Recession is not only very real, but appears to be rising.
From Econoday.com
Released on 12/22/2009 8:30:00 AM For Q3:09 PriorConsensusConsensus RangeActual Real GDP - Q/Q change - SAAR[3.5 %]2.7 %2.5 % to 2.9 %2.2 %GDP price index - Q/Q change - SAAR0.5 %0.5 %0.5 % to 0.5 %0.4 % Highlights
The recovery is not as strong as earlier believed. Real GDP growth for the third quarter was revised downward to an annualized 2.2 percent from the prior [estimates] of [at first 3.5 and then] 2.8 percent. The market consensus had expected a 2.7 percent gain for the latest estimate. The revisions were primarily due to lower estimates for inventories. Also revised lower were government purchases, nonresidential fixed investment, residential fixed investment, and personal consumption. Net exports were revised up. Final sales were revised down to 1.5 percent from an annualized 1.9 percent.
Released on 12/23/2009 10:00:00 AM For November, 2009 PriorConsensusConsensus RangeActual New Home Sales - Level - SAAR430 K440 K415 K to 460 K355 K
Highlights
Just when it appeared housing indications were lining up together, new home sales take a giant tumble. New home sales plunged 11 percent in November to a 355,000 annual rate that is 60,000 below low estimates! The hit includes downward revisions of 42,000 to the prior two months...
From Calculated Risk (Click For Full Size)
- Related -
Bloomberg:
Stiglitz Says U.S. Should Prepare for Second Stimulus
Nobel Prize-winning economist Joseph Stiglitz says the U.S. needs to prepare for a second stimulus package as there’s a “significant” chance growth will slow in the second half of 2010.
The world’s largest economy isn’t likely to expand fast enough to create jobs for new entrants into the labor force or compensate for increases in productivity that will reduce demand for workers, Stiglitz told reporters in Singapore today.
“The likelihood of this slowdown is very, very high and there’s a significant chance it may be in a negative range,” he said. “If the economy recovers, we don’t need to spend the money. If you don’t prepare now and the economy turns out to be as weak as I think it will likely be, then you are in a very difficult position.”
From Econoday.com
Released on 12/22/2009 8:30:00 AM For Q3:09 PriorConsensusConsensus RangeActual Real GDP - Q/Q change - SAAR[3.5 %]2.7 %2.5 % to 2.9 %2.2 %GDP price index - Q/Q change - SAAR0.5 %0.5 %0.5 % to 0.5 %0.4 % Highlights
The recovery is not as strong as earlier believed. Real GDP growth for the third quarter was revised downward to an annualized 2.2 percent from the prior [estimates] of [at first 3.5 and then] 2.8 percent. The market consensus had expected a 2.7 percent gain for the latest estimate. The revisions were primarily due to lower estimates for inventories. Also revised lower were government purchases, nonresidential fixed investment, residential fixed investment, and personal consumption. Net exports were revised up. Final sales were revised down to 1.5 percent from an annualized 1.9 percent.
Released on 12/23/2009 10:00:00 AM For November, 2009 PriorConsensusConsensus RangeActual New Home Sales - Level - SAAR430 K440 K415 K to 460 K355 K
Highlights
Just when it appeared housing indications were lining up together, new home sales take a giant tumble. New home sales plunged 11 percent in November to a 355,000 annual rate that is 60,000 below low estimates! The hit includes downward revisions of 42,000 to the prior two months...
From Calculated Risk (Click For Full Size)
- Related -
Bloomberg:
Stiglitz Says U.S. Should Prepare for Second Stimulus
Nobel Prize-winning economist Joseph Stiglitz says the U.S. needs to prepare for a second stimulus package as there’s a “significant” chance growth will slow in the second half of 2010.
The world’s largest economy isn’t likely to expand fast enough to create jobs for new entrants into the labor force or compensate for increases in productivity that will reduce demand for workers, Stiglitz told reporters in Singapore today.
“The likelihood of this slowdown is very, very high and there’s a significant chance it may be in a negative range,” he said. “If the economy recovers, we don’t need to spend the money. If you don’t prepare now and the economy turns out to be as weak as I think it will likely be, then you are in a very difficult position.”