This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stuck At Subpar Growth

WASHINGTON, Aug. 21, 2012 /PRNewswire/ -- Economic activity slowed during the first half of 2012, fueled by a decline in the pace of consumer spending amid a sluggish labor market. Inflation-adjusted consumer spending growth dropped nearly a percentage point during the second quarter to a one-year low of 1.5 percent, as spending fell in June for the first time since last August. However, strong July retail sales helped soothe concern of another pullback. In addition, the July jobs report posted the strongest gain in five months with 163,000 new jobs created. If sustained, such job growth may bolster weak consumer and small business confidence, helping to offset headwinds presented by the domestic policy environment and European debt markets. While modest economic growth is still expected through the end of this year, risks to the outlook remain on the downside, according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic & Strategic Research Group.

"The July data hasn't changed our forecast for slow growth in 2012, but we're increasingly focused on the looming 'fiscal cliff' near year-end," said Fannie Mae Chief Economist Doug Duncan. "The debt ceiling debate, as well as current legislation that could create a drag of more than 4 percent on GDP in 2013, may spur further caution among consumers and businesses alike. On the bright side, we continue to see positive trends in the housing sector, which is showing signs of a durable, long-term recovery."

In contrast to an otherwise dim economy, the broad housing outlook has stayed generally positive. The expected increase in home sales in 2012 over 2011 remains steady at approximately 9 percent and home price expectations for the remainder of the year are now trending upward. Inventories have dropped significantly during the past 12 months, and the resulting tighter supply has helped boost homebuilding activity in some areas. Overall, residential investment is expected to contribute approximately 0.2 percentage points to real GDP in 2012 – the first annual contribution since 2005. However, despite many positive indicators across the housing sector, any growth is likely to keep a modest pace due to other factors, including tight credit standards and an elevated level of foreclosures facing the market in the coming years.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs