With last week’s news that U.S. gross domestic product contracted 0.3 percent in the third quarter of the year, it appears the nation is officially headed toward a recession.
Economists generally refer to a recession as two consecutive quarters of GDP contraction.
“As of now, most forecasts indicate that we will experience a serious recession, perhaps comparable to the recession of the early 1980s, but nothing like the Great Depression,” said Simon Johnson, former chief economist to the International Monetary Fund and senior fellow at the Peterson Institute for International Economics.
Looking at Baltimore-area indicators, home values in the region fell for an 11th consecutive month in September. The median sale price — the point at which half of all houses sold for more and half for less — in Baltimore City and its five surrounding counties fell 5.38 percent in September to $255,000, according to data from Realtor-owned Metropolitan Regional Information Systems.
The total number of units sold this past month was down 2.2 percent from the previous year, to 1,931 from 1,975. “I think if people are waiting for the bottom, they’re not going to see it until the prices go back up,” said Vito Simone, president-elect of the Greater Baltimore Board of Realtors.
On the consumer spending front, Maryland’s retail sales declined less than one percent in August and September from the same period last year, according to the Comptroller’s Office of Maryland.
“While obviously very weak, this represents the best two-month performance since November and December of last year, and sales taxes are running slightly ahead of expectations,” Comptroller Peter Franchot wrote in his monthly state revenue report. “There is no reason to believe, however, that August and September results indicate a turning point in sales tax collections.”
Job losses increased, as the Labor Department reported the economy lost 159,000 payroll jobs in September, after losing 73,000 jobs in August.
The national unemployment rate was steady at 6.1 percent in September, but factoring in discouraged workers who aren’t actively seeking employment, the number is probably closer to 7.9 percent, said Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business.
Unemployment in the Baltimore metropolitan region slipped slightly in September to 4.7 percent from 4.8 percent in August, according to the Department of Labor, Licensing and Regulation. Maryland’s rate help steady at 4.5 percent.
TRACKING COSTS
• GAS PRICES
The average price for a gallon of regular in the Baltimore area is $2.46, down 30.3 percent from a month ago and 11.2 percent from a year ago.
The average price for a gallon of diesel in the Baltimore area is $3.33, down 18 percent from a month ago, but up 4.1 percent from a year ago.
• FOOD PRICES
The Baltimore-Washington food-at-home index is up 0.9 percent from last month and 6.4 percent from last year.
It costs $13.77 to buy groceries that cost $10 in December 1997, according to the index.
• ENERGY PRICES
The Baltimore-Washington energy index is down 2.3 percent from last month but up 22.4 percent from last year.
It now costs $24.15 to pay for energy items that cost $10 in November 1996, according to the index.
The Associated Press contributed to this article.
