Oct. 29, 2012 – NAFCU Chief Economist David Carrier said Friday that the 14 percent increase in third-quarter residential investment, which was reported in the government’s advance third-quarter GDP estimate, “indicates a clear bounce from the bottom of the housing market.”
Carrier pointed out that residential investment has now contributed to GDP growth for six consecutive quarters.
According to the Bureau of Economic Analysis, real GDP grew 2 percent in the third quarter, up from 1.3 percent in the second quarter. Carrier noted that the gain was driven by personal consumption expenditures, residential investment, and the first increase in government spending in two years.
Personal consumption expenditures continued to make the largest contribution to economic growth, Carrier noted, while the decline in net exports “reflects a slowing global economy and reduced demand for U.S. goods.”
“While the economy has been showing positive signs, GDP growth still has not been strong enough to reduce unemployment and government spending is expected to return to negative territory in the coming year,” the economist added.