On an upbeat note, the economy expanded 3.5% in the third quarter, capping the best six months in over a decade, following a 4.6% pace in the second quarter. The gains were fueled by an increase in exports, which surged 7.8%, and a spike in federal spending.
For the first time since December 22, 2010, consumers will be able to fill their gas tanks for less than $3 a gallon. According to AAA, on Saturday the average gas price will fall below $3 per gallon. The decline in gas prices is estimated to save consumers something to the tune of $250 million per day (from when the average price was $3.68 per gallon). According to the motor club: “The drop below $3.00 per gallon is significant because about 40% of American adults believe that gasoline is ‘too high’ when the price reaches that level”.
Pending home sales edged up .3%, reaching the second-highest level for this year. The National Association of Realtors Pending Home Sales Index rose to 105 in September (its fifth consecutive month with a reading above 100). NAR’s chief economist said that moderating price growth and steady inventories are keeping conditions favorable for buyers: “housing supply for existing homes was up in September 6% from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year”.
On a downbeat note, durable goods orders declined 1.3% in September, the second monthly drop in a row, in part due to a 16.1% drop in aircraft orders. Demand also waned for autos, heavy machinery and computers.
Consumer spending slipped .2% in September, marking the first decline in 8 months, as Americans purchased fewer cars and spent less on energy with falling oil prices.
Home price growth slowed in August, as the S&P/Case-Schiller home price edged up .2%, a slower pace than July’s .6%. On an annual basis, prices rose 5.6% – the slowest pace since November 2012. Annual price growth has not been in the double digits since April.