Signaling an improving economy, 2nd quarter gross domestic product expanded at a 1.4% rate. The Fed will consider this when making policy rate decisions.
The labor market also is continuing to show strength. Jobless claims rose slightly, but less than expected, and remained below the 300,000 mark for the 82nd time.
In testimony to Congress this week, Fed Chair Janet Yellen said a Fed increase to policy rates is still likely for this year. The strong data supports that action.
August new home sales were higher than expected, and July’s number was also increased. Strong demand for new homes continues to keep inventory in tight supply.
Signed contracts to buy existing homes were down slightly in August. However, the slight reduction was blamed on lack of supply, not on lack of demand.
One positive effect of tight inventory is that home prices continue to appreciate. Prices are rising at a rate of about 5% annually nationwide.
