Latest Posts:
Tag

Economy

Browsing
In Research & Trends

U.S. Economy Expanded at a Slower Pace in the Second Quarter of 2026 – Eye On Housing

No Comments


Real GDP growth slowed in the second quarter of 2026, as a pullback in government spending and slower growth in investment and exports, more than offset stronger consumer spending. Business investment continued to support growth, particularly through equipment and intellectual property products, while imports increased and remained a drag on headline GDP.

According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 1.5% in the second quarter, down from a 2.1% increase in the first quarter of 2026.

The latest GDP report also showed that inflationary pressures remained elevated. The price index for gross domestic purchases rose 5.7% in the second quarter, up from 3.6% in the first quarter. The Personal Consumption Expenditures (PCE) Price Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, increased 5.1%, compared with a 4.6% increase in the previous quarter. Excluding food and energy, the core PCE price index increased 3.4%, easing from 4.4% in the first quarter.

Breaking down the second-quarter data further, growth in real GDP primarily reflected gains in consumer spending, investment, and exports, which were partly offset by a decrease in government spending. Imports, which are a subtraction in the calculation of GDP, increased during the quarter.

Consumer spending, the backbone of the U.S. economy, accelerated in the second quarter, rising at an annual rate of 3.2% after a 0.5% increase in the first quarter. This acceleration helped offset weakness in other components of GDP and supported the broader measure of underlying private demand.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.9% in the second quarter, up from 1.7% in the first quarter. This measure suggests that private domestic demand strengthened even as headline GDP growth slowed.

Gross private domestic investment continued to expand in the second quarter, although at a slower pace than in the first quarter. Gains in equipment and intellectual property products supported business investment, while private inventories and some structures categories weighed on growth.

Nonresidential fixed investment increased 8.4% in the second quarter. Strong gains in equipment (+15.2%) and intellectual property products (+8.8%) offset a decrease in structures (-5.0%). Meanwhile, residential fixed investment (RFI) rose 1.5%, making its first positive contribution after five consecutive quarters of weakness. Within the residential category, investment in single-family permanent site structures rose 4.4% at an annual rate, multifamily permanent site structures declined 1.8%, and spending on improvements fell 5.0%.

Government spending declined 0.8% in the second quarter, reversing the prior quarter’s boost and contributing to the slowdown in overall economic growth.

Trade activity remained positive but less supportive of GDP growth. Exports continued to increase, although at a slower pace than in the first quarter, while imports accelerated. Because imports are subtracted from GDP, the increase in imports reduced second-quarter headline growth.

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Adds 57,000 Jobs in June – Eye On Housing

No Comments


The U.S. labor market lost momentum in June, with total nonfarm payroll employment rising by just 57,000, the smallest gain since February’s outright decline. Downward revisions to April and May payroll estimates subtracted a combined 74,000 jobs from previously reported totals, reversing the sizable upward revisions reported a month earlier and suggesting underlying hiring momentum was weaker than initially reported. The unemployment rate edged down to 4.2%, essentially unchanged from a year ago, but the decline reflected a shrinking labor force rather than stronger hiring, as both overall and prime-age labor force participation fell notably in June.

Wage growth accelerated modestly in June. Average hourly earnings rose 3.5% from a year earlier to $37.64, up from a 3.4% year-over-year pace in May. This pace is 0.3 percentage points lower than a year ago. Importantly, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 57,000 in June, following a downwardly revised gain of 129,000 in May. Revisions to prior months were broadly negative this month, a reversal from May’s positive trend. The change for April was revised down by 31,000, from +179,000 to +148,000, while the change for May was revised down by 43,000, from a preliminary +172,000 to +129,000. Combined, these revisions subtracted 74,000 jobs from previously reported totals, compared with the 93,000 upward revisions reported in the prior month.

Job growth in 2026 has moderated following a stronger spring. Through June, monthly payroll gains have averaged 92,000 on the current data vintage, down from the 114,000 pace reported through May, reflecting both June’s soft print and the downward revisions to April and May. This compares with an average of just 10,000 per month in 2025 and 122,000 per month in 2024. Over the past 12 months, total nonfarm employment has grown by 506,000, a considerably slower pace of expansion than earlier in the cycle.

The unemployment rate declined to 4.2% in June from 4.3% in May, essentially matching its year-ago level of 4.1%. However, the improvement was driven by a shrinking labor force rather than stronger hiring. Over the month, the number of unemployed persons fell by 213,000 to 7.1 million, while the number of employed persons declined by 507,000. Combined, the civilian labor force contracted by 720,000 in June.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—fell 0.3 percentage points to 61.5% in June. This marks the lowest level since March 2021 and remains well below its pre-pandemic level of 63.3% recorded at the start of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate dropped 0.6 percentage points to 83.3%, one of the sharpest single-month declines of this cycle and an indication that June’s pullback in labor force participation was not confined to either younger or older workers.

Job gains in June were concentrated in a handful of sectors. Employment increased by 36,000 in professional and business services, 25,000 in social assistance, and 22,000 in health care. In contrast, leisure and hospitality shed 61,000 jobs, reflecting weaker than usual seaonal hiring.

Construction Employment

Employment in the overall construction sector rose by 11,000 jobs in June, following a gain of 6,000 in May. Within the industry, residential construction employment declined by 8,600, while non-residential construction added approximately 19,900 jobs.

Residential construction employment now stands at 3.3 million in June, including 916,000 workers employed by builders and remodelers and 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction employment remains negative, reflecting an average monthly loss of 3,517 jobs and declines in four of the past six months. Over the last 12 months, residential construction has shed a net of 48,800 jobs, marking the sixteenth consecutive month of annual decline and the longest stretch of annual losses since the Great Recession. However, residential construction has gained 1,283,400 positions from its post-Great Recession low.

Meanwhile, the unemployment rate for construction workers rose to 6.2% in June on a seasonally adjusted basis, up from 5.2% in May and 3.7% in April. This marks the second consecutive monthly increase and the highest reading since July 2021. A year earlier, the construction unemployment rate stood at 4.5%. The continued increase suggests softness in construction labor market conditions.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Adds 115,000 Jobs in April – Eye On Housing

No Comments


The U.S. labor market continued to show resilience in April, with job growth persisting despite elevated interest rates and rising geopolitical uncertainty related to the Iran conflict. The unemployment rate held steady at 4.3%. Hiring gains were concentrated in health care, transportation and warehousing, and retail trade, underscoring continued strength in service-oriented sectors.

Wage growth accelerated modestly in April, with average hourly earnings rising 3.6% year-over-year. This pace is 0.3 percentage points lower than a year ago. Importantly, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 115,000 in April, following an upwardly revised gain of 185,000 jobs in March. Revisions to prior months were modest overall. The monthly change in total nonfarm payroll employment for February was revised down by 23,000 from -133,000 to -156,000, while the change for March was revised up by 7,000 from +178,000 to +185,000. Combined, these revisions reduced previously reported employment by 16,000 jobs.

Job growth in early 2026 remains well below 2024 levels but stronger than the weak pace recorded in 2025. Through April, monthly payroll gains have averaged 76,000, compared with 10,000 per month in 2025 and 122,000 in 2024.

The unemployment rate remained unchanged at 4.3% in April. Over the month, the number of persons unemployed rose by 134,000, while the number of persons employed declined by 226,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—declined 0.1 percentage points to 61.8%. This marks the lowest level since November 2021 and remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate held steady at 83.8%.

In April, job gains occurred in health care (+37,000), transportation and warehousing (+30,000), and retail trade (+22,000), while federal government employment continued to decline. Since reaching a peak in October 2024, federal government employment has fallen by 348,000 jobs, or 11.5%.

Construction Employment

Employment in the overall construction sector rose by 9,000 jobs in April, following a downwardly revised gain of 16,000 in March. Within the industry, residential construction shed 10,400 jobs, while non-residential construction added 19,000 jobs.

Residential construction employment now stands at 3.3 million in April, including 927,000 workers employed by builders and remodelers and nearly 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction remains negative, reflecting an average monthly loss of 2,333 jobs and declines in three of the past six months. However, over the last 12 months, residential construction has shed a net of 49,200 jobs, marking the fourteenth consecutive annual decline and the longest stretch of annual losses since the Great Recession. Despite these declines, residential construction has gained 1,297,100 positions from its post-Great Recession low.

Meanwhile, the unemployment rate for construction workers declined to 3.7% in April on a seasonally adjusted basis, remaining relatively low compared with historical norms.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Rebounded in the First Quarter of 2026 – Eye On Housing

No Comments


Real GDP growth accelerated in the first quarter of 2026, rebounding from a weak finish at the end of 2025, as government spending recovered following a disruptive shutdown. First-quarter growth was also supported by strong gains in business investment in equipment, driven by an artificial intelligence spending boom and rapid data center construction. Meanwhile, consumer spending showed signs of softening as elevated inflation continued to weigh on household purchasing power.

According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 2.0% in the first quarter, up from a 0.5% increase in the fourth quarter of 2025. This growth rate came in slightly above the NAHB forecast for the quarter (1.8%).

However, the latest data from the GDP report indicates that inflationary pressures remained elevated. The price index for gross domestic purchases rose 3.6% in the first quarter, compared with an increase of 3.7% in the fourth quarter of 2025. The Personal Consumption Expenditures (PCE) Price Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, accelerated to 4.5%. This is higher than a 2.9% rise in the previous quarter.

Breaking down the first-quarter data further, the acceleration in real GDP primarily reflected increases in government spending, exports, and business investment, which were partially offset by a slowdown in consumer spending. Imports, which are a subtraction in the calculation of GDP, increased during the quarter.

Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 1.6% in the first quarter, the slowest pace since the first quarter of 2025. Within this category, spending on services grew at a 2.4% annual rate, while spending on goods edged down 0.1%.

Gross private domestic investment contributed 1.48 percentage points to headline GDP growth, led by robust gains in equipment and intellectual property products, alongside a buildup in private inventories. These increases were partially offset by declines in both residential and nonresidential structures.

Nonresidential fixed investment rose sharply, increasing 10.4% in the first quarter. Strong gains in equipment (+17.2%) and intellectual property products (+13.0%) offset a decrease in structures (-6.7%). Meanwhile, residential fixed investment (RFI) declined 8.0% in the first quarter, marking the fifth consecutive quarterly decline. Within the residential category, single-family permanent site structures fell 8.0% at an annual rate, multifamily permanent site structures posted a modest 1.9% increase, and spending on home improvements dropped 4.6%.

Government spending provided a notable boost to growth, largely due to an increase in federal nondefense expenditures following the prior quarter’s disruptions. 

Trade activity also strengthened, with both exports and imports increasing. The increase was primarily driven by the goods trade, particularly in computers, peripherals, and related components. 

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Loses 92,000 Jobs in February – Eye On Housing

No Comments


The U.S. labor market weakened in February, as payroll employment declined and the unemployment rate rose to 4.4%. The cooling labor market could place the Federal Reserve in a challenging position as policymakers weigh slower job growth against inflation pressures from rising oil prices.

Wage growth accelerated slightly in February, with average hourly earnings rising 3.8% year-over-year. This pace is 0.3 percentage points lower than a year ago. Importantly, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment fell by 92,000 in February, following a downwardly revised gain of 126,000 jobs in January. This marks the sixth monthly decline since January 2025 and the second-largest monthly job loss during that period.

Estimates for the previous two months were revised lower. The monthly change in total nonfarm payroll employment for December was revised down by 65,000 from +48,000 to -17,000, while the change for January was revised down by 4,000 from +130,000 to +126,000. Combined, these revisions reduced previously reported employment by 69,000 jobs.

The unemployment rate ticked up to 4.4% in February from 4.3% in January. Over the month, the number of persons unemployed rose by 203,000, while the number of persons employed declined by 185,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—declined 0.1 percentage points to 62.0%. This was the lowest rate since January 2022 and remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate decreased to 83.9%.

Health care, which has been the primary growth driver of payroll growth in recent months, lost 28,000 jobs in February, largely due to a strike at Kaiser Permanente during the BLS survey period. Employment in the information sector also trended down, shredding 11,000 jobs, while federal government cut another 10,000 jobs.  Meanwhile, the social assistance sector added 9,000 jobs, driven by gains in individual and family services (+12,000).

Construction Employment

Employment in the overall construction sector declined by 11,000 jobs in February, following an upwardly revised gain of 48,000 in January. Within the industry, residential construction shed 7,100 jobs, while non-residential construction lost 3,800 positions.

Residential construction employment now stands at 3.3 million in February, including 929,000 workers employed by builders and remodelers and nearly 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction remains negative, at a loss of 533 per month, reflecting losses in three of the past six months. Over the last 12 months, residential construction has seen a net loss of 46,100 jobs, marking the twelfth consecutive annual decline and the longest stretch of annual losses since the Great Recession. Since the low point following the Great Recession, residential construction has gained 1,306,900 positions.

In February, the unemployment rate for construction workers edged down slightly to 4.6% on a seasonally adjusted basis, remaining relatively low compared with historical norms.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Ends 2025 on a Slower Note – Eye On Housing

No Comments


Real GDP growth slowed sharply in the fourth quarter of 2025 as the historic government shutdown weighed on economic activity. While consumer spending continued to drive growth, federal government spending subtracted over a full percentage point from overall growth.

According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 1.4% in the final quarter of 2025, a notable deceleration from a 4.4% increase in the third quarter. This growth rate was below the NAHB forecast for the quarter.

Furthermore, the latest data from the GDP report indicates that inflationary pressures intensified over the quarter. The price index for gross domestic purchases rose 3.7%, up from a 3.4% increase in the third quarter of 2025. The Personal Consumption Expenditures Price (PCE) Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, increased 2.9% in the fourth quarter. This is slightly higher than a 2.8% rise in the previous quarter.

For the full year, real GDP grew 2.2% in 2025. It marks a slowdown from the 2.8% increase in 2024 and stands as the weakest annual growth rate since the pandemic. The annual gain matched NAHB’s forecast and primarily reflected continued strength in consumer spending and gains in investment.

Breaking down the fourth-quarter data further, the increase in real GDP primarily reflected increases in consumer spending and investment, partially offset by decreases in government spending and exports. Imports, which are a subtraction in the calculation of GDP, decreased during the quarter as tariffs had measurable effects.

Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 2.4% in the fourth quarter, the slowest pace since the first quarter of 2025. Spending on services remained solid, increasing at a 3.4% annual rate, while spending on goods edged down 0.1%.

Gross private domestic investment added 0.66 percentage points to headline GDP growth in the fourth quarter. The gain in investment was primarily driven by increases in intellectual property products, private inventory investment, and equipment spending.

Government spending fell, reflecting the effects of a prolonged federal government shutdown. 

Nonresidential fixed investment increased 3.7% in the fourth quarter. The increases in equipment (+3.2%) and intellectual property products (+7.4%) offset the decrease in structures (-2.4%). Meanwhile, residential fixed investment (RFI) declined 1.6% in the fourth quarter, marking the fourth consecutive quarterly decline. Within the residential category, single-family permanent site structures fell 5.2% at an annual rate, multifamily permanent site structures declined 3.6%, and spending on home improvements dropped 3.2%.

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Rebounded in Second Quarter

No Comments


Real GDP growth rebounded in the second quarter, driven by a turnaround in the trade balance and stronger consumer spending.

According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 3.0% in the second quarter of 2025, following a 0.5% contraction in the first quarter.

The latest data from the GDP report suggests that inflationary pressures are easing. The GDP price index rose 2.0% for the second quarter, down from a 3.8% increase in the first quarter of 2025. The Personal Consumption Expenditures Price (PCE) Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, rose 2.1% in the second quarter. This is down from a 3.7% increase in the first quarter of 2025.

This quarter’s increase in real GDP primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and increases in consumer spending.

Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 1.4% in the second quarter, up from 0.5% in the first quarter but well below the 2.8% pace recorded a year earlier. Both goods and services contributed to the gain, with goods spending rising at a 2.2% annual rate and spending on services increasing at a 1.1% annual rate.

A steep drop in imports also provided a significant boost to GDP, as imports are subtracted in GDP calculations. Imports fell 30.3% in the second quarter, a sharp reversal from the 37.9% surge in the first quarter.

Nonresidential fixed investment increased 1.9% in the second quarter. The increases in equipment (+4.8%) and intellectual property products (+6.4%) offset the decrease in structures (-10.3%). Meanwhile, residential fixed investment (RFI) declined 4.6% in the second quarter, following a 1.3% decline in the previous quarter. Within the residential category, single-family structures fell 12.6% at an annual rate, multifamily structures declined 1.3%, and improvements rose 4.2%.

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.

Discover more from Eye On Housing

Subscribe to get the latest posts sent to your email.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Added 139,000 Jobs in May

No Comments


Despite ongoing economic and policy uncertainty, the labor market remains resilient, though early signs of softening are beginning to emerge. Job growth moderated in May, and employment figures for March and April were notably revised downward. The unemployment rate remained at 4.2%.

In May, wage growth remained unchanged. Year-over-year, wages grew at a 3.9% rate. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 139,000 in May, following a downwardly revised increase of 147,000 jobs in April. Since January 2021, the U.S. job market has added jobs for 53 consecutive months, making it the third-longest period of employment expansion on record. Monthly employment growth has averaged 124,000 per month in 2025, compared with the 168,000 monthly average gain for 2024.

The estimates for the previous two months were revised down. The monthly change in total nonfarm payroll employment for March was revised down by 65,000 from +185,000 to +120,000, while the change for April was revised down by 30,000 from +177,000 to +147,000. Combined, the revisions were 95,000 lower than previously reported.

The unemployment rate remained unchanged at 4.2% in May. Despite this stability, the overall labor force shrank with notable shifts. The number of employed persons decreased by 696,000, while the number of unemployed persons increased by 71,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—decreased two percentage points to 62.4%. The overall labor force participation rate remains below its pre-pandemic levels of 63.3% at the beginning of 2020. Among individuals aged 25 to 54, the participation rate declined two percentage points to 83.4%. The rate for the prime working-age group (25 to 54) has been trending downward since peaking at 83.9% last summer.

In May, industries like health care (+62,000), leisure and hospitality (+48,000), and social assistance (+16,000) continued to see gains. Meanwhile, federal government lost 22,000 jobs in May and has shed 59,000 jobs since January 2025, reflecting the effects of government cutbacks. The BLS notes that “employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.”

Construction Employment

Employment in the overall construction sector rose by 4,000 in May, following a downwardly revised gain of 7,000 in April. While residential construction lost 7,400 jobs, non-residential construction employment added 11,300 jobs during the month.

Residential construction employment now stands at 3.3 million in May, broken down as 963,000 builders and 2.4 million residential specialty trade contractors. The six-month moving average of job gains for residential construction was -2,617 a month, reflecting job losses recorded in three of the past six months, specifically in January, March, and May of 2025. Over the last 12 months, home builders and remodelers experienced a net loss of 1,000 jobs, marking the first annual decline since September 2020. Since the low point following the Great Recession, residential construction has gained 1,360,600 positions.

In May, the unemployment rate for construction workers declined to 3.8% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic.

Discover more from Eye On Housing

Subscribe to get the latest posts sent to your email.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

Housing’s Share of the Economy Grows Higher to Start the Year

No Comments


Housing’s share of the economy grew to 16.4% in the first quarter of 2025, according to the advance estimate of GDP produced by the Bureau of Economic Analysis. This is the highest reading since the third quarter of 2022 and is up 0.2 percentage points from the fourth quarter of 2024.

The more cyclical home building and remodeling component – residential fixed investment (RFI) – was 4.1% of GDP, up from 4.0% in the previous quarter. The second component – housing services – was 12.3% of GDP, up from 12.2% in the previous quarter. The graph below stacks the nominal shares for housing services and RFI, resulting in housing’s total share of the economy.

Housing service growth is much less volatile when compared to RFI due to the cyclical nature of RFI. Historically, RFI has averaged roughly 5% of GDP, while housing services have averaged between 12% and 13%, for a combined 17% to 18% of GDP. These shares tend to vary over the business cycle. However, the housing share of GDP lagged during the post-Great Recession period due to underbuilding, particularly for the single-family sector.

In the first quarter, RFI added 5 basis points to the headline GDP growth rate, marking the second straight quarter of positive contributions. RFI was 4.1% of the economy, recording a $1.216 trillion seasonally adjusted annual pace. Among the two segments of RFI, residential structures rose 1.2% while residential equipment rose 5.5%.

Breaking down the components of residential structures, single-family structure RFI grew 5.9%, while multifamily investment fell 11.5%. RFI for multifamily structures has contracted for seven consecutive quarters. Permanent site structure RFI, which is made up of single-family and multifamily RFI, grew 1.2%.  Other structures RFI rose 0.6% in the first quarter, down from 11.4% the previous period.

The second impact of housing on GDP is the measure of housing services. Similar to the RFI, housing services consumption can be broken out into two components. The first component, housing, includes gross rents paid by renters, owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units), rental value of farm dwellings, and group housing. The inclusion of owners’ imputed rent is necessary from a national income accounting approach, because without this measure, increases in homeownership would result in declines in GDP. The second component, household utilities, is composed of consumption expenditures on water supply, sanitation, electricity, and gas.

For the first quarter, housing services represented 12.4% of the economy or $3.691 trillion on a seasonally adjusted annual basis. Housing services expenditures grew 3.4% at an annual rate in the first quarter and contributed 41 basis points to GDP growth. Real personal consumption expenditures for housing grew 1.3%, while household utilities expenditures grew 18.7%. Real personal expenditures for natural gas services grew 53.1% in the first quarter, as residential consumption of natural gas recorded its highest monthly level since January 2014, at 1.035 trillion cubic feet in January 2025. Through the first two months of 2025, residential households consumed 1.833 trillion cubic feet of natural gas, higher than the 1.582 trillion in 2024 and 1.498 trillion in 2023.

Discover more from Eye On Housing

Subscribe to get the latest posts sent to your email.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
In Research & Trends

U.S. Economy Contracted in First Quarter of 2025

No Comments


The U.S. economy contracted in the first quarter of 2025 for the first time in three years, driven by a sharp surge in pre-tariff imports, softening consumer spending, and a decline in government spending.

According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025, following a 2.4% gain in the fourth quarter of 2024. This marks the first quarter of economic contraction since the first quarter of 2022. NAHB predicted a 0.2% increase for the first quarter of 2025.

Furthermore, the data from the GDP report suggests that inflationary pressure persisted. The GDP price index rose 3.4% for the first quarter, up from a 2.2% increase in the fourth quarter of 2024. The Personal Consumption Expenditures Price (PCE) Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, rose 3.6% in the first quarter. This is up from a 2.4% increase in the fourth quarter of 2024.

The contraction in real GDP primarily reflected a sharp increase in imports and a decrease in government spending.

Imports, which are a subtraction in the calculation of GDP, surged at an annualized rate of 41.3% in the first quarter, as businesses rushed to stockpile goods ahead of implementing tariffs. While goods imports spiked by 50.9%, services imports increased by 8.6%. The import surge contributed to a record-high trade deficit and subtracted more than five percentage points from the headline GDP figure.

Government spending decreased at an annual rate of 1.4% in the first quarter. Federal spending fell sharply by 5.1%, partially offset by a modest 0.8% increase in state and local government expenditures.

Consumer spending, a key driver of the economy, softened. It rose at an annual rate of 1.8%, the slowest pace in seven quarters. Spending on goods increased by 0.5%, while expenditure on services grew by 2.4%.

Private inventories were the largest contributor to the increase in gross private domestic investment.

Nonresidential fixed investment increased by 9.8%, with notable increases in equipment (+22.5%) and intellectual property products (+4.1%). Residential fixed investment posted a 1.3% gain, following a 5.5% increase in the previous quarter. Within residential categories, single-family structures rose 5.9%, improvements increased 3.6%, while multifamily structures fell 11.5%.

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.

Discover more from Eye On Housing

Subscribe to get the latest posts sent to your email.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

Read More
By
Load More
Pin It