An­a­lysts see slow be­gin­ning to 2013

Econ­omy

Austin American-Statesman - - BUSINESS - Con­tin­ued from B

Novem­ber, sug­gest­ing that growth could re­main weak in the early part of next year. The Con­fer­ence Board said its in­dex of lead­ing in­di­ca­tors dropped 0.2 per­cent in Novem­ber, com­pared with Oc­to­ber, when the in­dex had risen 0.3 per­cent. It was the first de­cline in the in­dex since a 0.4 per­cent fall in Au­gust. The in­dex is in­tended to an­tic­i­pate eco­nomic con­di­tions three to six months out. The Novem­ber de­cline marked the fourth time the in­dex has fallen this year.

■ The Na­tional As­so­ci­a­tion of Real­tors said U.S. sales of pre­vi­ously oc­cu­pied homes jumped to their high­est level in three years last month, bol­stered by steady job gains and record-low mort­gage rates. The report was the lat­est sign of a sus­tained re­cov­ery in the hous­ing mar­ket. Sales rose 5.9 per­cent to a sea­son­ally ad­justed an­nual rate of 5.04 mil­lion in Novem­ber. That’s up from 4.76 mil­lion in Oc­to­ber. Pre­vi­ously oc­cu­pied home sales are on track for their best year in five years. Sales are up 14.5 per­cent from a year ago, though they re­main be­low the roughly 5.5 mil­lion that are con­sis­tent with a healthy mar­ket.

Robert Kav­cic, an econ­o­mist at BMO Cap­i­tal Mar­kets, said the up­ward re­vi­sion to the econ­omy’s third-quar­ter growth didn’t change his view that the econ­omy is slow­ing in the cur­rent quar­ter to an an­nual growth rate be­low 2 per­cent. Kav­cic said a tem­po­rary jump in de­fense spend­ing and busi­ness stock­pil­ing in the Ju­lySeptem­ber pe­riod is likely be­ing re­versed this quar­ter.

And many econ­o­mists aren’t ex­pect­ing much im­prove­ment in the Jan­uary-March quar­ter. The lat­est forecast from 48 econ­o­mists for the Na­tional As­so­ci­a­tion of Busi­ness Eco­nom­ics is for an an­nual growth rate of just 1.8 per­cent in the first quar­ter of 2013. Growth at that level is con­sid­ered too weak to sig­nif­i­cantly lower the un­em­ploy­ment rate, which was 7.7 per­cent in Novem­ber.

But if Congress and the White House reach agree­ment to avoid the fis­cal cliff, growth could ac­cel­er­ate next year, many econ­o­mists, in­clud­ing Fed­eral Re­serve Chair­man Ben Ber­nanke, have said. The Fed last week said it plans to keep a key in­ter­est rate at a record low as long as un­em­ploy­ment re­mains above 6.5 per­cent. And it forecast that un­em­ploy­ment would stay that high un­til late 2015.

The government’s fi­nal es­ti­mate of a 3.1 per­cent growth rate for gross domestic prod­uct last quar­ter is a sharp im­prove­ment over its ini­tial es­ti­mate of a 2 per­cent rate — a fig­ure that it later re­vised up to 2.7 per­cent based on a buildup in busi­ness stock­piles.

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