Economic Snapshot: GDP grows in the second quarter

After extreme weather conditions brought about disappointing numbers in the first quarter, gross domestic product is seeing significant improvements.

GDP grew 4.2 percent in the second quarter, a much stronger rebound than expected from last quarter’s 2.1 percent decrease. Last year, GDP in the second quarter increased 2.5 percent.

The price index for gross domestic purchases for gross domestic purchases, measuring prices paid by U.S. residents, increased 1.9 percent last quarter, which increased 1.4 percent in the first quarter. Real personal consumption expenditures increased 2.5 percent, compared to 1.2 percent in the first quarter.

This quarter was a much stronger rebound that most economists predicted and should be viewed as positive news for growth outlook.

Pending home sales index

The Pending Home Sales Index rose 3.3 percent to 105.9 in July but is still 2.1 percent below July 2013. However, the index is at its highest level since August 2013, when it was 107.1, and is above 100 for the third consecutive month. Readings above 100 are considered an average level of contract activity.

The Northeast region saw the largest increase this month, rising 6.2 percent to 89.2 in July and tracking 8.3 percent above the previous year.

New home sales

New home sales fell in July to 412,000, a 2.4 percent decrease from June but 12.3 percent above July 2013. New home sales are counted when the contracts are signed, whereas existing home sales are counted with the transactions close.

The median sales price for new homes sold in July was $269,800, while the average sales price was $339,100. Several homebuilders reported sales were even or greater than those at the same time last year, however prospective buyers remain hesitant.

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