Weekly Economic Commentary 9/29/14

Housing Hiatus?93014

The most recent figures on gross domestic product (GDP) — the broadest
measure of economic activity — revealed that residential investment (a.k.a.
housing) grew at an 8.8% annualized pace between the first and second
quarters of 2014. As a result, housing contributed 0.3 percentage points to the
overall 4.6% gain in GDP in Q2. It was the first time since Q3 2013 that housing
added to GDP growth; but it marked the 12th quarter of the last 15, dating back
to late 2010, that housing has made a positive contribution to GDP. Prior to
that, between late 2005 and late 2010, housing had been a drag on the overall
economy in 17 of the 20 quarters (or five years), as the economy endured the
housing-induced Great Recession and its aftermath [Figure 1]…

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