Analysts see slow beginning to 2013
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.