Economy gains steam in this week’s Markets in a Minute!
- Signaling an improving economy, 2nd quarter gross domestic product expanded at a 1.4% rate. The Fed will consider this when making policy rate decisions.
- The labor market also is continuing to show strength. Jobless claims rose slightly, but less than expected, and remained below the 300,000 mark for the 82nd time.
- In testimony to Congress this week, Fed Chair Janet Yellen said a Fed increase to policy rates is still likely for this year. The strong data supports that action.
- August new home sales were higher than expected, and July’s number was also increased. Strong demand for new homes continues to keep inventory in tight supply.
- Signed contracts to buy existing homes were down slightly in August. However, the slight reduction was blamed on lack of supply, not on lack of demand.
- One positive effect of tight inventory is that home prices continue to appreciate. Prices are rising at a rate of about 5% annually nationwide.