Economy Watch: Initial Unemployment Claims Down, 4Q GDP Stands Pat

Unemployment claims for the week ending March 24 dropped by 5,000 to reach 359,000. The OECD sees economic growth for America, but a slower road for the large euro-zone economies. And home sales in Las Vegas were up in February, driven by all-cash buyers.

By Dees Stribling, Contributing Editor

Image courtesy Flickr user aflcio

Unemployment claims for the week ending March 24 dropped by 5,000 to reach 359,000, according to the Bureau of Labor Statistics on Thursday. The total marked the lowest that particular number has been since April 2008, back in the days of crummy growth, but before the full-fledged Great Recession. The less volatile four-week moving average was down 3,500 to 365,000, the lowest tally since March 2008.

The Bureau of Economic Analysis also affirmed on Thursday that U.S. GDP growth in the fourth quarter of 2011 was at a 3 percent annualized rate, up from 1.8 percent in 3Q11. The number represented the last revision to growth for the quarter, and the growth reflected input from a lot of different kinds of private growth, such as inventory investment, consumer shopping, exports and even real estate. Lessened government spending at all levels continued to be a drag on GDP, as did increasing imports.

Cars sales added 0.47 percentage points to fourth-quarter GDP growth, after adding only 0.12 percentage points to third-quarter growth. Sales of computers were down, however, adding only 0.12 percentage points to the fourth-quarter increase in GDP after adding 0.22 percentage points to third-quarter growth.

OECD Predicts Uptick in U.S. Growth, Downtick in European Growth

Organization for Economic Cooperation and Development said in a report on Thursday that the U.S. economy is taking the high road and the largest economies of the euro zone (Germany, France and Italy) are taking the low road for the rest of 2012. Japan, just to keep things interesting, is going to grow more than anyone has been predicting until very recently.

The Paris-based think tank predicts that the U.S. economy will grow at an annualized 2.9 percent during the first quarter of 2012, and almost the same, 2.8 percent, during the second quarter. As for Japan, the organization is predicting 3.4 percent growth for the first quarter but 1.4 percent for the second.

As for the ailing euro-zone economies of Germany, France and Italy, the OECD believes they will, collectively, contract during the first quarter by 0.4 percent, then eke out a gain of 0.9 percent in the second quarter. Naturally, grouping the relatively robust Teutonic economy with the sickly Italic one and the in-between Gallic economy isn’t all together meaningful. The OECD expects Germany to grow a little in both quarters, Italy to contract in both quarters, and France to split the difference, contracting in the first and growing in the second.

Vegas Home Sales Dominated by Cash Buyers

Home sales in Las Vegas, the very epicenter of the bad housing market of current times, leapt in February to 4,240 units. according to real estate data specialist DataQuick. The total was up 5 percent compared with January and up 8.9 percent year-over-year, and also represented the highest level (496 units) of new home sales in four years and the highest level (3,444 units) for existing homes since 2005.

Who’s doing all the buying? Cash buyers bought 52.9 percent of Vegas-area homes that sold in February, according to DataQuick, which is actually down from 56.7 percent a year earlier. But that’s still a lot of investors and speculators hoping for a buy-low, sell-high scenario. Many of these cash buyers were also absentee buyers, who purchased Vegas-area homes at near-record 48.2 percent of all homes sold in the area in February. (Some absentee buyers were probably looking for bargains on vacation homes, besides the large number looking for investment properties.) Sales out of foreclosure and short sales made up about two-thirds of all Las Vegas-area home sales during the month.

Wall Street ended mixed on Thursday, with the Dow Jones Industrial Average gaining 19.61 points, or 0.15 percent. The S&P 500 lost 0.16 percent and the Nasdaq was down 0.31 percent.