The holiday season is a very important measure of the health of the economy every year. This year, the results could be even more important.
n our prolonged struggle to recover from the severe recession, we have encountered many obstacles. Initially, the housing crisis certainly put a major dent in the pace of consumer spending.
The good news is that over the painful years of the recovery, consumers have been saving and this puts them in better shape to return to more “normal” spending habits. Indeed, retail sales growth has been strong for the majority of this year. But nothing is more important than the spending that occurs in the last quarter of the year.
Keep in mind that we still face obstacles. The European debt crisis is in the headlines every day and the fear is that a meltdown in Europe will be felt at home. Congress seems to be getting nowhere with regard to deficit reduction while state and local governments have been laying off workers for the better part of two years. The shadow inventory of foreclosures is holding the important real estate sector back.
Where does that leave us? We need the consumer to lead the recovery right now. If consumer spending continues to be strong then the housing recovery will follow more quickly. Companies which are flush with cash will be more likely to hire. The November employment report to be released early in December will be a good gauge of business optimism going into the Holiday season.
Our best hope? Everyone has a great Holiday season and gets the gifts they want and we have momentum going into the New Year.
Homebuyers scooped up more previously owned homes in October, slowly putting a dent in the huge inventory on the market, an industry report showed.
Sales of existing homes rose 1.4 percent last month,to an annual rate of 4.97 million homes, up from a downwardly revised 4.90 million homes in September, the National Association of Realtors reported.
That was higher than expected. Economists polled by Briefing.com had expected an annual rate of 4.85 million homes in October.
Compared to a year ago, the rate of existing home sales has jumped 13.5%, from 4.38 million units.
Continued gains in home sales have lightened up the inventory of homes on the market, the report showed. Total housing inventory at the end of October slipped 2.2% to 3.33 million existing homes for sale, representing an 8-month supply at the current sales pace. That’s down from an 8.3-month supply in September, and continues an ongoing downward trend since hitting a record high of 4.58 million in July 2008.