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The U.S. economy contracted in the 3rd quarter of 2008 according to the latest release by the U.S. Commerce Department. The final estimate report released today showed that the U.S. Gross Domestic Product equaled the previous estimate released in November and contracted at an annual rate of 0.5 percent in the July to September quarter. The second quarter GDP grew by a 2.8 percent annual rate of growth and the 1st quarter advanced by 0.9 percent. Today's GDP numbers matched economic forecasts expecting a contraction of 0.5 percent for the quarter.
Contributing largely to the decreased GDP for the 3rd quarter was a decline in consumer spending which makes up approximately two-thirds of U.S. economic activity. Consumer spending also known as the personal consumption expenditure fell by 3.8 percent in the quarter after increasing by 1.2 percent in the 2nd quarter and fell to its lowest reading since 1980.
Exports contributed positively to the GDP numbers but declined sharply from the 2nd quarter as exports of goods and services increased by 3.0 percent in the third quarter after increasing by 12.3 percent in the 2nd quarter. Imports declined in the 3rd quarter by 3.5 percent following a decline of 7.3 percent in the 2nd quarter.
US Existing Home Sales decline more than expected in November.
U.S. Existing Homes sales dropped in month of November according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses decreased 8.6 percent in November to a seasonally adjusted annual rate of 4.49 million units. November's sales data follows a revised 4.5 percent decrease in October and surpassed market forecasts that were expecting the sales rate to fall by only 1.0 percent to a 4.93 million unit pace.
The report cited the economic uncertainty as continuing to hamper sales activity into November. NAR chief economist Lawrence Yun said that, "The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level. We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001."
The median sales price for existing homes in October registered $181,300. This is a decline of 13.2 percent from November 2007 which produced a median price of $208,800. Total housing inventory increased in November by 0.1 percent to a total of 4.20 million homes.
US New Homes sales decline in November.
New Home Sales in the United States also declined in November according to data released by the Department of Commerce. New home sales fell 2.9 percent in November for an annual rate of 407,000 which fell short of October's revised total of 419,000 sales. Market forecasts were predicting a decline of 4.2 percent to a sales rate of 415,000 new homes. November's annual sales rate compared to November 2007 is down by 11.6 percent. The median sales price of new homes registered $220,400 in November while the average sales price came in at $287,500.
US Dollar showing mixed results in forex trading.
The U.S. dollar has been mixed in forex trading today against the major currencies. The dollar has advanced against the euro, pound, yen, Australian dollar and New Zealand dollar while declining verses the Canadian dollar and Swiss franc.
The euro has declined verses the dollar as the EUR/USD has edged down from today's 1.3979 opening to trading at approximately 1.3958 in the afternoon of the US trading session at 12:58pm ET.
The British pound has fallen today verses the American currency from 1.4831 to trading at 1.4703 dollars per pound. The dollar has advanced against the Japanese yen today as the USD/JPY has gained from its 90.26 opening to trading at 90.72.
The dollar has declined against the Canadian dollar after opening at 1.2301 earlier today to trading later at 1.2155.
Meanwhile, the USD has also declined against the Swiss franc from 1.0932 to trading at 1.0865. The Australian dollar has lost ground verses the USD as the AUD/USD trades at 0.6803 after opening today at 0.6835 while the New Zealand dollar has declined verses the USD and trades at 0.5671 after opening at 0.5745.
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