Gloomy Holiday for the Housing Sector

The painfully sharp declines experienced in home sales during last November had turned out a very important and highly alarming newsflash for those who are concerned with this industry: that it may very well turn out to be an inevitably glum holiday for them. This was surmised from economic reports on the performance of this sector that was released earlier.

Unsurprising and Dispiriting Economic News

Reports that came from the United States economic arm regarding the state of this sector turned out to be a two fold feeling of unsurprising news and disheartening news. While there was a revised report that turned out during the third quarter performance of the United States gross domestic products that were a bit higher, this was not enough to convince people of a recovery.

In fact, the University of Michigan had a consumer sentiment index last month that was actually revised to exhibit an upward turn in results, but hints at weak home sales from the previous months and invariably illustrates the weakness of this particular sector. The combination of this data had ended up making analysts look at the downspin and its effect on their economic outlook especially during the weeks that led to the Christmas season. This was according to the firm Action Economics.

Dismal Results of the Survey last December 23, 2008

In terms of gross domestic product, the BEA or the Bureau of Economic Analysis submitted reports that hinted at a decrease of the GDP by point five percent during the third quarter. This was actually unchanged from the preliminary estimates that were done a month before. Such data was lined up and compared with the consensus of the market. Some revisions to these components were on the verge of being insignificant. Exports and imports were equally revised as well to show an upward turn, but little can be said about the lasting impact that such an effort has. Following this, some nonresidential investments were also tinkered with to show upward movement but were later on off-set thanks to some residential constructions as well as inventories.

Beth Ann Bovino, a senior economist from the company S&P also adds that such changes exhibit little impact on the forecast of their fourth quarter earnings. She adds that there is a six percent decline to this. Accordingly, Action Economics also remarked that around a six point five percent rate of decline would therefore exceed the final drop of three percent in the last quarter of the nineties. Further dampers include an eight point six percent decrease in the sales of existing homes which contributed to an annual rate of around four point forty nine million last November. This was, according to Action Economics, actually below the usual market consensus that has a batting average of four point ninety two million.