A Quick Look at Recent Economic Numbers
Some economists believe the economy will start expanding again in the third quarter. The second quarter numbers at still estimates at this point and are subject to revisions. Thankfully the housing market is starting to look brighter because of the government programs designed to keep current mortgage rates low.
The contributing factors to the contraction in the second quarter continue to be the same factors that put us in a recession. The factors include personal spending, non-residential fixed investments, residential fixed investments and exports. As expected the economic stimulus packages are contributing to the Gross Domestic Product (GDP).
The automotive industry contributed positivity to GDP in the second quarter, adding .20 percent in growth, after subtracting 1.69 from GDP in the first quarter. The industry will contribute even more in the third quarter with the cash for clunkers program being such a huge hit.
Personal income decreased 1.3 percent in June and personal disposable income also decreased 1.3 percent in June. Personal saving as a percentage of disposable personal income decreased to 4.6 percent in June, compared with 6.2 percent in May.
Folks are feeling better about the future and are saving less, not to mention CD rates are pathetic so there is no incentive to save. A couple of years ago the rate was actually negative, since the credit crisis and the recession the personal savings rate has been one bright spot.
Statics source: U.S. Bureau of Economic Analysis