Last Week in the News


The Consumer Price Index (CPI) increased by 0.3% in September, the fastest pace in four months and slightly above the 0.2% advance that economists had expected, the Labor Department said October 17. The core CPI, which excludes energy and food, rose by 0.2%, in line with analysts’ expectations. Overall food prices jumped by 0.5% last month, led by a 13.1% surge in the cost of dairy products and a 7.2% increase in poultry prices.


Meanwhile, the Conference Board’s Index of Leading Economic Indicators, released October 18, rose 0.3% in September to 137.9, slightly below analysts’ forecast for a 0.4% rise. The modest increase follows a sharp 0.8% drop in August. Of the 10 data points tracked, vendor performance and stock prices were strongest. The housing market continued to lag.


Construction of new U.S. homes fell 10.2% in September to a seasonally adjusted annual rate of 1.19 million units, a 14-year low, the Commerce Department reported October 17. Applications for building permits also fell sharply, dropping 7.3% to 1.25 million units.


On October 16, the National Association of Homebuilders said its housing market index, which tracks developers’ expectations of future home sales, fell two points to 18 in October, the lowest level since the index began in 1985. An index reading higher than 50, a level not seen since May 2006, indicates positive sentiment.


Jobless claims increased 28,000 for the week ending October 19, four times larger than economists had expected and the biggest one-week surge since February 10.


This week look for updates on existing home sales and new home sales on October 25.

Last Week in the News


The Producer Price Index (PPI), the prices paid by businesses at the wholesale level, jumped by 1.1% in September, more than double what analysts had expected, the Labor Department reported October 12. However, core PPI, which strips out volatile food and energy prices, edged up just 0.1% in September, lower than the 0.2% rise in August.


U.S. consumer sentiment in early October slipped to 82.0, the lowest reading in more than a year and below the median forecast of 84.0, according to the Reuters/University of Michigan Survey of Consumers released October 12. Consumer sentiment is viewed as a key indicator of future spending, which accounts for two-thirds of the U.S. economy.


Fueled by a big jump in auto sales, retail sales increased 0.6% in September, double the gain forecast by economists, the Commerce Department said October 12. Areas of strength included sales at grocery, electronics and appliance stores.


The U.S. trade deficit declined to $57.6 billion in August, down 2.4% from July, the Commerce Department reported October 11. The improvement reflected a 0.4% rise in U.S. exports and a 0.4% drop in imports.


Foreclosure filings, which include default notices, auction sale notices and bank repossessions, reached 223,538 in September, nearly double the 112,210 in the same month a year ago, Inc. reported October 11. September's filings, however, were down 8% from August's 243,947, the firm said.


Rates on 30-year and 15-year fixed-rate mortgages increased slightly following a better-than-expected report on job growth.


This week look for updates on housing starts and building permits on October 17.

Last Week in the News

The nation's service economy expanded at a faster-than-expected pace in June, as the Institute for Supply Management (ISM) said on July 5 that its index of business activity in the non-manufacturing sector registered 60.7, topping May's reading of 59.7 and Wall Street's forecast of 58.1. A reading above 50 indicates expansion, while one below 50 signals contraction. The June reading was the highest since April 2006, when it hit 61.1.


Output at U.S. factories, plants and utilities also expanded in June, the ISM reported July 2. The ISM's manufacturing index rose to 56 in June, above the May reading of 55, and higher than the market expectation of 55.4. The reading marked the fifth consecutive month of growth for the manufacturing sector.


Late payments on home equity loans -- payments that are 30 days or more past due -- rose to 2.15% in the first quarter of this year, up sharply from 1.92% in the final quarter of 2006, the American Bankers Association (ABA) reported July 3. On a brighter note, the ABA also reported that late payments on credit card bills dropped to 4.41% in the first quarter, down from 4.56% in the fourth quarter of 2006, the best showing in nearly a year.


The average rate for a 30-year, fixed-rate mortgage fell to a one-month low, Freddie Mac said July 5. Rates have ebbed in recent weeks as investors' fears concerning inflation have eased.


This week look for updates on the trade balance on July 12 and retail sales on July 13.

Last Week in the News

Sales of new single-family homes fell 1.6% in May, far better than the 6.2% decline Wall Street had anticipated, the Commerce Department said June 26. The median price of a new home fell 0.9% to $236,100 in May, down from $238,200 in May 2006.


Existing home sales fell 0.3% in May to 5.99 million units, the slowest sales pace in four years, the National Association of Realtors said June 25. The median price of an existing home was $223,700, down 2.1% from a year earlier, marking the 10th straight month that the price has shown a year-over-year decline.


Construction spending in May climbed 0.9%, the largest jump in nearly 18 months, and well above Wall Street's expectation of a 0.1% rise, the Commerce Department reported June 29. Spending on residential construction, however, fell 0.8% to an annually adjusted rate of $549 billion, the 15th consecutive monthly decrease.


Orders to U.S. factories for big-ticket manufactured goods -- expected to last three or more years -- dropped by 2.8% in May, the largest amount in four months, and a far bigger slide than the 1% decline economists had forecast, the Commerce Department said June 27. A 22.7% plunge in commercial aircraft orders paced the decline.


Meanwhile, consumer spending in May rose by 0.5% for the second month in a row, the Commerce Department said on June 29. Incomes, which fuel spending, rebounded in May by 0.4%, after falling 0.2% in April.


This week look for updates on the unemployment rate on July 6.

Last Week in the News

Fueled by a surge in gasoline prices, May's Consumer Price Index increased 0.7%, its fastest pace in 20 months, the Labor Department reported June 15. However, core consumer prices, which exclude volatile food and energy costs, rose only 0.1%, slightly lower than the 0.2% analysts had predicted.


The Producer Price Index, which measures inflation at the wholesale level, rose 0.9% in May, worse than the 0.6% increase economists had expected. Yet, wholesale core inflation increased a moderate 0.2%, slightly better than the 0.3% hike analysts had anticipated.


Meanwhile, compared to April, retail sales in May surged 1.4%, the sharpest rise in 16 months and double the increase analysts had expected, the Commerce Department said June 13. The increase should ease fears that consumer spending, which accounts for two-thirds of the economy, could falter in coming months under the impact of rising gasoline prices, a challenging housing market and recent increases in interest rates.


Rates on 30-year mortgages rose for a fifth straight week, hitting the highest level in 11 months, Freddie Mac said June 14. The rise parallels rising yields on Treasury securities.


Foreclosures for May were up 19% from April and up nearly 90% from May 2006, RealtyTrac reported June 14. In Nevada, there was one foreclosure filing for every 166 households last month, nearly four times the national average and the highest rate in the country.


This week look for updates on building starts and housing permits on June 19.