First-Quarter GDP, Vacancy Rates Disappoint

Uneven recovery numbers persist as new reports on vacancy rates and GDP trend downward.

National vacancy and homeownership rates fell and the gross domestic product (GDP) was lower than expected in the first quarter, indicating a still-anemic recovery underscored by market uncertainty.

Vacancy rates for rental housing reached 8.8 percent, down 0.9 percent from the first quarter of 2011 and down 0.6 percent from the previous quarter, according to a U.S. Census report released today. Fewer vacancies have pushed up the median asking rent price to $721, the highest level since the first quarter of 2009.

The 2.2 percent homeowner vacancy rate is slightly contracted from both the first quarter of 2011 (2.6 percent) and the last quarter (2.3 percent). The homeownership rate dropped to 65.4 percent, below the 66.4 percent rate in the first quarter of 2011, and behind the previous quarter?EUR??,,????'???s 66.0 percent. The homeownership level is at its lowest since the first quarter of 1997, and down from a record 69.2 percent in June 2004.

The advance estimate of first-quarter GDP released by the Department of Commerce on Friday was similarly disappointing, showing only 2.2 percent annual growth, down from 3.0 percent growth in the fourth quarter of 2011. (GDP must maintain at least 2 percent growth to accommodate natural population growth and maintain unemployment levels.) Unemployment claims, at a post-recession low of 8.2 percent, have trended up for the last four weeks, as growth has slowed following a stronger-than-normal winter.

Increasing market sectors were lead by a 2.9 percent increase in personal consumption spending, up 0.8 percent from the previous quarter and tying the second strongest quarter for consumption since the recovery began. Exports also increased by 5.4 percent in the first quarter, doubling the 2.7 percent increase in the quarter before but down 2.5 percent year-over-year.

Federal government spending accounted for the largest percentage decrease, dropping 5.6 percent in the first quarter, following a 6.9 percent decline in the previous quarter and marking the third largest quarterly decline since 2010.