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Economy grew more slowly in summer than thought

by Roberts Johnson and Rachel Diedrich, Real Estate B
WASHINGTON—The U.S. economy grew more slowly in the summer than previously thought because consumers spent less than the government had first estimated. But economists expect growth in the current October-December quarter to be stronger.

The Commerce Department says the economy grew at an annual rate of 1.8 percent in the July-September quarter. That was the fastest growth this year, up from 1.3 percent in the April-June quarter. But it was down slightly from last month's estimate that the economy was expanding at a 2 percent rate in the summer.

The government now estimates that consumer spending grew at a 1.7 percent annual rate last summer, instead of 2.3 percent. The updated estimate reflects data showing less spending on hospitals.

Economists think the economy is growing at an annual rate of more than 3 percent in the final three months of this year. That would be the fastest pace since a 3.8 percent performance in the spring of 2010.

Among the positive factors are a brightening job market, strong holiday shopping, further gains in factory production and cheaper gas prices, which leave consumers with more money to spend on other items.

Stronger growth would be needed to significantly drive down the unemployment rate. Unemployment did fall to 8.6 percent last month after remaining around 9 percent for 2 1/2 years. The rate is now the lowest since March 2009, two months after President Barack Obama took office. Unemployment passed 9 percent that spring and had stayed there or higher for all but two months since then.

Still, Obama faces a re-election vote in less than a year and a presidential campaign that will turn on the economy. He may face voters next fall with the highest unemployment of a sitting president seeking election since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

There are also threats that could derail the economy's modest recovery. The biggest is Europe, where the 17 nations that use the common euro currency are struggling to deal with debt problems and keep their currency union together. Many economists are already worried that Europe has entered another recession, which would be bad news for U.S. companies that export to that region.

Another source of uncertainty for 2012 is what Congress will end up doing about extending the Social Security payroll tax cut. The tax cut, which benefits 160 million Americans, is set to expire Jan. 1. Also expiring on Jan. 1 will be extended unemployment benefits for the long-term unemployed.

If lawmakers don't renew the tax cut and the extended benefits, it could lower economic growth by as much a full percentage point in 2012.

Mark Zandi, chief economist for Moody's Analytics, said that he is forecasting economic growth of 2.6 percent for 2012 if the tax cut and extended benefits are renewed. But if those programs are allowed to lapse, Zandi predicted the economy will only manage to grow by 1.7 percent next year, a lackluster pace that would match what many analysts expect for all of 2011.

The third-quarter pickup in growth came even though incomes after taxes fell at a 1.9 percent rate in the July-September period. It was the sharpest decline in two years, reflecting still-high unemployment and lower pay raises.

The government's last look at economic growth in the third quarter showed that the economy received a boost not only from a pickup in consumer spending but also from a surge in business investment on equipment and software. Such investment grew at an annual rate of 16.2 percent.

Trade was also a positive factor as growth in U.S. exports outpaced imports. But government spending fell at an annual rate of 0.1 percent. The decline reflected sharp cutbacks as state and local governments cope with budget problems.

By MARTIN CRUTSINGER AP Economics Writer

Read more: Economy grew more slowly in summer than thought - The Denver Post http://www.denverpost.com/business/ci_19599937#ixzz1hHCnI9B6
Read The Denver Post's Terms of Use of its content: http://www.denverpost.com/termsofuse

 

Unemployment applications lowest since April '08

by Roberts Johnson and Rachel Diedrich, Real Estate B
Posted: 12/22/2011 06:37:37 AM MST
Updated: 12/22/2011 07:07:50 AM
MST
By DANIEL WAGNER AP Business Writer
WASHINGTON—The number of people applying for unemployment benefits dropped last week to its lowest level since April 2008, extending a downward trend that shows the job market strengthening.

First-time applications for unemployment benefits fell 4,000 to a seasonally adjusted 364,000, the Labor Department said Thursday. It was the third straight weekly drop.

The four-week moving average, a less volatile gauge, fell for the 11th time in 13 weeks. At 380,250, it's the lowest since June 2008. Applications generally must fall below 375,000—consistently—before hiring is strong enough to reduce the unemployment rate.

Unemployment applications are a measure of the pace of layoffs. Job cuts have fallen sharply since the recession, though many employers remain slow to start hiring.

The declining number of applications suggests that the economy may finally be regaining strength, 2 1/2 years after the Great Recession ended. The nation added at least 100,000 jobs every month from July through November, the first five-month streak since 2006.

"When you fire fewer people, hiring unquestionably follows," said Dan Greenhaus, chief global strategist at BTIG LLC.

If unemployment applications continue declining, Greenhaus said, the number of jobs created each month will rise to 200,000 and the unemployment rate might fall as low as 8 percent before November's elections.

In the past three months, employers have added an average of 143,000 net jobs a month. That compares with an average of 84,000 in the previous three months.

More small businesses plan to hire than at any time in three years, a trade group said last week. A separate private-sector survey found more companies are planning to add workers than at any time since 2008.

Overall economic growth appears to be tracking the job market's improvement. The economy was barely growing when the year started. In the final quarter, growth might exceed 3 percent, up from 2 percent in the July-September period.

Still, applications for unemployment benefits are above the level needed to lower the unemployment rate significantly. The four-week moving average for new claims has exceeded that number since June 2008. Unemployment has been above 8 percent for almost three years.

Before the recession, there generally were 280,000 to 350,000 new applications for unemployment benefits each week. The number peaked at 659,000 in March 2009.

The unemployment rate fell in November to 8.6 percent from 9 percent, but about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they're no longer counted as unemployed.

And weak hiring doesn't always appear in unemployment claims data. Employers slashed payrolls deeply during the recession. If they're worried about the slow pace of recovery, they may hold off layoffs—but not hire, either.

The figures come as Congress appears close to going home without extending emergency unemployment benefits, which are set to expire at the end of the year.

About 6.7 million people are receiving unemployment benefits. About 2.2 million of them will lose their benefits by mid-February and 3.6 million others will lose theirs by the end of March if Congress doesn't extend the emergency benefits.

Lawmakers are deadlocked over continuing the program, which is attached to legislation that would extend a Social Security tax cut.

House Republicans rejected a two-month extension passed by a bipartisan majority in the Senate. President Barack Obama has called on lawmakers to approve the short-term measure so that they will have time to negotiate a full-year extension.

If Congress doesn't renew the two measures for 2012, economists say, the economy's growth could slow by as much as 1 percentage point



Read more: Unemployment applications lowest since April '08 - The Denver Post http://www.denverpost.com/business/ci_19599931#ixzz1hHBZXXlJ
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Two new acts join 9News Parade of Lights

by Roberts Johnson and Rachel Diedrich, Real Estate B

Organizers of the 9News Parade of Lights have added more of a cultural flair to this year’s festivities, putting samba dancers and a West African-inspired drum ensemble in the lineup.

The 37th annual parade will showcase three-person Kusogea Nobi Drum Ensemble for the first time. The Denver-based group will perform on a roughly 12-by-6 trailer, which organizers built for the group.

In addition, performers from nonprofit Boulder Samba School are slated to perform for the first time in the parade.

The groups will join existing cultural performers Colorado Mestizo Dancers, Japanese drum ensemble Denver Taiko and, tomorrow only, Shaolin Hung Mei Kung Fu.

“It’s part of an outreach that we have to make sure that the parade is really embracing the cultural and ethnic diversity of our community,” said Susan Rogers Kark, vice president of the Downtown Denver Partnership. “It was something that we felt would really add to it.”

Bob Hall, director of the Kusogea Nobi Drum Ensemble, said

the parade’s inclusion of various cultural performances will showcase a “little flavor of home, so to speak.” wherever the performers are from. He said: “It’s basically universal pulse.”

9News Parade of Lights

WHEN: The parade, which will feature more than 40 entries, will be at 8 p.m. Friday, December 2, and 6 p.m. Saturday, December 3.

WHERE: Route includes Tremont Place and 17th, Arapahoe and 15th streets.

For more, go to: www.denverparadeoflights.com

Matthew Rodriguez at 303-954-2409 or mrodriguez@denverpost.com

What the holidays mean for the Colorado real estate market

by Roberts Johnson and Rachel Diedrich, Real Estate B

What does Christmas time mean for buyers and sellers in the Colorado real estate market? To be honest, its a mixed bag and here is what I mean.

Buyers: Expect to see less choice on the market. The metro area has been struggling with having enough supply of homes all year, and at Christmas, inventory drops even further. Many sellers will take their home off the market in December because they dont want to be bothered with showings when guests and relatives are visiting. The holidays are busy enough and keeping your home in show-ready condition to sell can make life harder. There’s good news here though for buyers. Homes on the market over Christmas are motivated sellers. You may be able to negotiate a better deal at this time of the year than during peak selling season.

Sellers: You may be asking yourself, does anyone go to look at and buy homes in December? The answer is yes, and only the serious ones. Most of the time, people looking at homes over the holidays are the ones that must buy now, like a relocation client that needs to start work Jan. 2nd. If you get a showing over the next four weeks, at least you can rest assured that its probably not a looky-loo. The other option here is for you to take the home off the market for 30 days and take a break. The rest might be good for you. Put the home back on the market after the first of the year, you’ll get a new MLS #, and it will appear as a new listing. The real estate business should pick up again around the 15th of January.

 

Displaying blog entries 1-4 of 4

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