Sales of Homes Fall, GDP Grows - Is a Key Industry Not that Important Anymore?
This is strange, but very true, and something which has recently been substantiated by official figures. For the first ever time, it seems like the housing market is having very little, if any, effect on the country's Gross Domestic Production.
In January 2010, as has been revealed by National Association of Realtors, housing sales slumped by 7.2% as compared to the previous month, while the economy managed to grow more than expected.
So does this mean that the housing sector, which is definitely one of the key sectors of the country's economy, has stopped having any effect on the overall figures? Or is it that the other sectors managed to perform so exceptionally well that it overshadowed the weak home sales?
"The housing sales numbers are weak because we have a weak labor market, and when that improves we'll see people buying and selling homes", opinionated Patrick Newport, an economist at IHS Global Insight.
Maybe we can take some refuge in that statement and hope that the sector will bounce back soon, but even so, one cannot ignore the fact that it has been going weak for quite some time now. Despite all the measures and schemes being offered by the Government, consumers do not seem to be very eager to purchase new properties, or work on their existing ones.
Maybe the general population is still too hurt by the recession and wants to play it safe. Then how are the retailers posting profits after profits? All other industries - food, clothing, accessories - almost all of them, seem to be going strong.
But then again, at least the economy is not contracting, so let's take solace in that.