• Jobless Claims Edge Higher, GDP Growth Projected, Rent Inflation Declines

    Unemployment Claims Edge Higher 

    New jobless claims ticked up in the week before Christmas but remain historically low, while the number of those still using unemployment insurance rose to the highest since February.

    The Labor Department reported Thursday that initial claims increased 9,000 to a seasonally adjusted 225,000 in the week ending Dec. 24. That's 3,250 higher than the comparable week last year. The four-week moving average decreased 250 to 221,250.

    Initial claims have yet to see a significant dent from layoffs in the technology and mortgage industry sectors.

    Nonseasonally adjusted claims, the raw data, showed claims increased 23,146 to 271,590, one of the highest levels this year.

    Continuing claims, those currently receiving unemployment, increased 41,000 to 1.71 million, and the four-week average increased 25,250 to 1,679,500. Both are at their highest since the first two weeks of February.

    GDP Growth Projected Higher

    The Atlanta Federal Reserve’s gross domestic product tracker shows growth in the final three months is expected to far exceed many forecasts if the number holds.

    The Atlanta Fed’s latest estimate on Dec. 23 shows GDP growing 3.7% in the final months of this year, up from the 2.7% from its estimate three days earlier. GDP grew 2.9% in the third quarter, picking back up after two quarters of small contraction.

    A Philadelphia Fed survey of economic forecasters in November projected 1% growth this quarter. In mid-December, The Conference Board increased its forecast from negative 0.5% to 0.7%. The consensus among major prognosticators has pegged GDP growth at just over 1% for the quarter.

    The Atlanta Fed’s estimate, which won’t be updated again until Jan. 3, is based on many economic indicators. Its recent rise came after a positive jobs report, increases in real personal consumption expenditures and real gross private domestic investment growth.

    Some economists still say, though, that the country will enter a recession next year, even as the economy and the consumer continue to defy expectations. While supply chain problems are easing and the Federal Reserve is taming inflation, “rising interest rates will tip the US economy into a broad-based recession,” The Conference Board said in its mid-December report.

    Rent Inflation Declining

    Residential rent inflation slowed in December to mark the eighth consecutive month of declines, according to an alternative index created by Penn State University.

    The December index, which tracks through October, showed that the rental inflation rate fell to 4.278% from 5.846% in September. February marked the peak in the index when 11.871% was recorded. The index tracks data back to 2004.

    In many markets across the country, rent growth was strongest in the first quarter of this year. But rent growth has been slowing since.

    The index relies more on real-time data while the consumer price index, which shows rent inflation increasing, lags by months.

    Researchers at the Bureau of Labor Statistics and the Cleveland Federal Reserve Bank recently created a similar index to Penn State’s that also shows rent inflation declining.

    Source: www.CoStar.com