GDP Exceeds Early 4Q Reports, Existing Home Sales Dip 7.2%
4Q GDP Report Shows a Strong Increase in Inventories, First-Time Buyer Home Sales Reduce 3%
February 26, 2010 - Growing slightly faster than the 5.7% reported early in the 4Q, the gross domestic product index rose to 5.9%. Nearly two thirds of the GDP growth seen in the last few months of 2009 was accounted by an increase in inventories and not by final sales. As of late, businesses have been reducing their overstocks at a much faster pace than normal.
February's consumer sentiment fell to 73.6, down from the 74.4 that was observed in January. The report indicates that consumers are getting a bit more discouraged with their incomes and overall job situation. The gauge of current economic conditions was up 0.7 from January, coming in at 81.8.
Amongst the several data reports of the day, perhaps one of the most crucial is that covering existing home sales. In January, sales of previously owned U.S. homes declined 7.2% to an annual pace of 5.05 million. While the initial tax credit incentive had ignited the purchases of homes, its extension seems to be stagnating demand. Its lack of stimulation has resulted in the drop of first-time home buyers; dipping from 43%, January's home sales by first-time buyers only reached 40% for the month.