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| Economic update - 10.22.07 |
Posted by Deb Brengman |
10/22/2007
1:48:19 PM |
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.
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| Economic update - 10.16.07 |
Posted by Deb Brengman |
10/17/2007
1:26:11 AM |
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.
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| Economic update - 07.09.07 |
Posted by Deb Brengman |
7/10/2007
12:41:32 AM |
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.
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| Economic update - 07.02.07 |
Posted by Deb Brengman |
7/2/2007
6:15:48 PM |
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.
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| Economic update - 06.18.07 |
Posted by Deb Brengman |
6/18/2007
9:09:48 PM |
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.
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| Economic update - 06.13.07 |
Posted by Deb Brengman |
6/13/2007
10:33:05 AM |
Last Week in the News
The U.S. trade deficit -- the gap between what America sells abroad and what it imports -- totaled $58.5 billion in April, a 6.2% improvement over the March deficit, the Commerce Department reported June 8. Record-high exports of $129.5 billion, reflecting strong sales of soybeans and other farm products, commercial aircraft and industrial machinery, helped shrink the gap.
The nation's service economy showed surprising strength as the Institute for Supply Management (ISM) said June 5 that its index of business activity in the non-manufacturing sector registered 59.7 in May, higher than April's reading of 56 and Wall Street's expectation of 56 for May. A reading above 50 indicates expansion.
A better-than-expected service economy underscored comments by Federal Reserve Chairman Ben Bernanke to a June 5 international money conference that the U.S. economy will rebound from an anemic performance at the start of the year to a "moderate pace" in coming quarters. On the mortgage front, he added, "We must walk a fine line: We have an obligation to prevent fraud and abusive lending; at the same time, we must tread carefully so as not to suppress responsible lending or eliminate refunding opportunities for subprime borrowers."
Meanwhile, mortgage rates rose a sixth straight week to their highest levels in 10 months, Freddie Mac reported June 7. Analysts attributed the rise to an improving service economy and low unemployment, resulting in a growing competition and higher-wage (inflationary) environment for workers.
This week look for updates on the Producer Price Index on June 14 and the Consumer Price Index on June 15.
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| Economic update - 06.04.07 |
Posted by Deb Brengman |
6/4/2007
10:23:24 PM |
Last Week in the News
The first-quarter growth rate of the nation's gross domestic product was downgraded from a preliminary estimate of 1.3% to just 0.6%, the worst showing in more than four years, the Commerce Department said May 31. The foreign trade deficit was largely blamed for stunting growth.
Employers, however, did their part for the economy, adding 157,000 jobs to their payrolls in May, the Labor Department reported June 1. Economists had forecast growth of 135,000 jobs.
Personal income slipped 0.1% in April from March, the first drop in two years, the Commerce Department said June 1. The decline follows the pay-out of unusually large Wall Street bonuses and corporate stock options in the first quarter of 2007. Analysts expected personal income to rise 0.3%.
Although personal income dipped, consumer spending -- a key ingredient to a healthy economy -- rose a strong 0.5% in April, ahead of analysts' forecast of 0.4%, the Commerce Department reported June 1.
Manufacturing output also rose, as the Institute for Supply Management said its manufacturing index in May climbed to 55, above April's 54.7 reading and higher than the market expectation of 54. A reading above 50 indicates growth.
Consumer confidence increased as well, with The Conference Board, a private research group, reporting that its index of consumer confidence for May moved to 108 from 106.3 in April. Economists had expected a reading of 105.
For the week, mortgage rates on fixed-rate products rose again, Freddie Mac said May 31.
This week look for updates on factory orders on June 4 and the trade balance on June 8.
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| Economic update - 05.28.07 |
Posted by Deb Brengman |
5/28/2007
10:21:03 AM |
Last Week in the News
Existing home sales in April fell to a 5.99 million-unit annual pace, a 2.6% decrease from March's rate, the lowest level since June 2003, the National Association of Realtors said May 25. Economists had expected a slight rise in home resales. The inventory of homes for sale grew 10.4% to 4.2 million units, which represents an 8.4 months' supply at the current sales pace.
New home sales in April, however, rose to an annual pace of 981,000 units, up 16.2% from March's rate, the sharpest climb in 14 years. The median price of a new home sold in April fell 10.9% from a year earlier to $229,100, the sharpest year-over-year drop in median new home prices since December 1970. Taken together, the sales surge and price decline indicate that builders are taking extraordinary steps to sell inventories of new homes.
For the week ended May 24, rates on 30-year, fixed-rate loans increased on upbeat consumer confidence and speculation that the Federal Reserve would not cut interest rates anytime soon.
Meanwhile, orders for durable goods -- big-ticket items expected to last three or more years -- increased 0.6% in April, slightly ahead of March's 0.5% pace, the Commerce Department said May 24. The increase fell short of Wall Street's expectation for a 0.9% rise.
Jobless claims rose 15,000 to 311,000 for the week ended May 19, in line with analysts' forecasts, the Labor Department said May 24.
This week look for updates on consumer confidence on May 29 and the unemployment rate on June 1.
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| Economic update - 05.21.07 |
Posted by Deb Brengman |
5/21/2007
10:49:17 PM |
Last Week in the News
The Consumer Price Index (CPI), which measures inflation at the retail level, rose 0.4% in April, compared with a 0.5% rise in March, the Commerce Department reported May 15. Economists had forecast a 0.6% increase. The more closely watched core CPI, which strips out volatile food and energy prices, rose 0.2%, after a 0.1% gain in March. While core CPI edged up in April, the 12-month core CPI average declined to a 2.3% rise, the lowest rate since April 2006.
Industrial production jumped a bigger-than-expected 0.7% in April, the Federal Reserve said May 16. Analysts expected production to rise only 0.3%. April's rise, paced by gains in auto and high-tech manufacturing, was only the third increase in the last eight months.
The Conference Board's Index of Leading Indicators -- a key gauge of future economic growth -- slipped 0.5% in April, greater than the 0.1% decline analysts had predicted. Of the 10 indicators, only stock prices and the money supply (the total amount of currency and checkable deposits in circulation, which influences interest rates) moved in a positive direction.
Housing starts unexpectedly rose 2.5% in April, confounding analysts who had forecast a 2.2% drop, the Commerce Department reported May 16. But applications for building permits plunged 8.9% in April, the sharpest fall in 17 years.
Americans filed 5,000 fewer jobless claims for the week ended May 12, the Labor Department said May 17. Economists expected a slight rise. Meanwhile, mortgage rates for the week ended May 16 nudged up on lingering Federal Reserve concerns about inflation.
This week look for updates on new home sales on May 24 and existing home sales on May 25.
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| Economic update - 05.14.07 |
Posted by Deb Brengman |
5/14/2007
10:11:38 PM |
Last Week in the News
The Producer Price Index (PPI), which measures the price of goods at the wholesale level, rose 0.7% last month, down from a 1% gain in March, the Labor Department reported May 11. But the more closely watched core PPI, which strips out volatile food and energy prices, showed no rise after also remaining unchanged in March. Economists had forecast a 0.2% percent rise in core PPI.
The Federal Reserve kept the federal funds rate, an overnight bank lending rate that affects credit card, home equity and other loan rates, at 5.25%. In its statement, May 9, the Fed noted that "the predominant policy concern remains the risk that inflation will fail to moderate as expected."
Retail sales unexpectedly fell 0.2% in April, hurt by rising gasoline prices and a sluggish housing market. Economists had forecast a 0.4% increase.
The U.S. trade deficit widened more than expected in March to $63.9 billion, as higher oil prices helped push total imports to the second highest level on record, the Commerce Department reported May 10. The trade gap swelled 10.4% from February, surprising Wall Street economists who had pegged the trade gap at $60 billion.
The Mortgage Bankers Association's index of mortgage applications increased 3.6% for the week ended May 4, the third consecutive week the MBA's applications index has risen. Meanwhile, Freddie Mac reported that mortgage rates on 30-year terms eased slightly for the week ended May 11.
This week look for updates on the Consumer Price Index on May 15 and housing starts on May 16.
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| Economic update - 05.07.07 |
Posted by Deb Brengman |
5/7/2007
10:12:33 AM |
Last Week in the News
Employers added a net gain of 88,000 jobs to their payrolls in April, down from the 177,000 net increase in March and below Wall Street's forecast of a 100,000 net gain, the Labor Department reported May 4. April's job growth was the weakest since November 2004, when there was a gain of only 65,000 jobs. The unemployment rate edged up to 4.5% in April from the 4.4% reading in March.
U.S. business productivity -- a measure of how much any given worker can produce in an hour -- grew a greater-than-expected 1.7% in the first quarter of 2007. Economists expected a rise of only 1%. Meanwhile, unit labor costs grew 0.6% in the first quarter of 2007, well below the 4% rise analysts predicted.
The Institute of Supply Management (ISM) reported May 3 that its April index of manufacturing activity moved to 54.7, from 50.9 in March. Readings above 50 point to expansion in the economy. Forecasters expected the April index to hit 51.
The ISM also said its non-manufacturing index rose to 56 in April from 52.4 in March, beating Wall Street expectations for a reading of 53. The service sector represents about 80% of U.S. economic activity.
The National Association of Realtors' Pending Home Sales Index fell 4.9% in March, following a 1.1% increase in February, the trade group reported May 1. Economists had predicted a 0.4% rise in the index.
Mortgage rates for the week ended May 4 remained unchanged on signs of weakening consumer spending and cooling inflation, Freddie Mac said.
This week look for updates on the Producer Price Index and retail sales on May 11.
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| Economic update - 05.01.07 |
Posted by Deb Brengman |
5/1/2007
1:43:26 AM |
Last Week in the News
Economic growth slid to 1.3% in the first quarter of 2007, the slowest pace in four years, the Commerce Department reported April 27. By comparison, the rate of growth in the final quarter of 2006 was 2.5%.
Sales of existing homes plunged 8.4% in March, the worst one-month decline in 18 years, the National Association of Realtors said April 25. The median price of an existing home fell to $217,000, a 0.3% decline from March 2006. Inventories of unsold homes nationally rose to a 7.3-month supply, the highest level since October.
New home sales in March rose 2.6% over February, but were down 23% from March 2006, the second weakest year-over-year sales performance since September 2001, the Census Bureau reported April 25. Surprisingly, the median price of a new home sold in March was $254,000, up 6.3% from the price of a new home sold a year earlier.
Orders for durable goods -- those expected to last three years or longer -- climbed a robust 3.4% in March, the Commerce Department said April 25. The pickup in orders followed February's 2.4% gain, handily surpassing Wall Street economists' expectations for a 2.5% increase.
Reflecting worries over rising gasoline prices, consumer confidence in the economy fell to a less-than-expected 104 in April from 108 in March, according to the Conference Board's Index of Consumer Sentiment released April 24. Analysts expected the index to come in at 105.
For the week ended April 26, mortgage rates fell for the second straight week, following the sharp drop in existing home sales and signs of waning U.S. consumer confidence.
This week look for updates on the April unemployment rate on May 4.
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| Economic update - 04.24.07 |
Posted by Deb Brengman |
4/24/2007
1:14:43 AM |
Last Week in the News
Fueled by surging energy prices, the closely watched Consumer Price Index (CPI) shot up 0.6% in March, the biggest increase since a similar rise in April 2006. However, core inflation -- which excludes volatile energy and food prices -- rose 0.1% in March, the smallest increase in three months, and better than the 0.2% rise Wall Street had expected. Inflation for the first quarter of 2007 was 4.7%, far above the 2.5% increase for all of 2006.
The Conference Board said its Index of Leading Economic Indicators climbed a tepid 0.1% to 137.4 in March, as analysts had expected. The latest reading reverses two straight months of declines. The index is designed to forecast economic activity over the next three to six months.
Retail sales rose 0.7% in March, up from a 0.5% gain in February. It was the best showing since a 1.1% rise in December, the Commerce Department reported April 16. Analysts had predicted a 0.8% increase.
Construction of new homes edged up 0.8% in March, the second straight monthly rise, the Commerce Department reported April 17. Applications for new building permits also rose by 0.8% in March, the first advance in three months, providing a glimmer of hope that the worst of the housing downturn might be over.
For the week ending April 19, interest rates on 30-year and 15-year fixed-rate mortgages declined, remaining well below year-ago levels, Freddie Mac said April 19.
This week look for updates on existing and new home sales on April 25.
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| Economic update - 04.17.07 |
Posted by Deb Brengman |
4/17/2007
10:12:23 AM |
Last Week in the News
American consumers lost confidence for the third straight month, with the Reuters/University of Michigan preliminary Consumer Sentiment Index, released April 13, hitting an eight-month low of 85.3 in April from March's 88.4. Consumers responding to the survey said they expect inflation to rise.
The March Producer Price Index (PPI) -- which measures prices before they reach consumers -- rose 1 percent after February's 1.3 percent increase, the Labor Department reported April 13. March's jump was slightly ahead of a 0.7 percent increase predicted by experts, who attributed March's jump to rising energy and food costs. Meanwhile the core PPI, which excludes food and energy prices, was unchanged.
Contrary to economists' predictions of a widening U.S. trade deficit, the gap actually narrowed in February to $58.4 billion from January's $58.9 billion, the Commerce Department reported April 13. Economists had predicted the deficit would widen in February to $60 billion. Imports of goods and services fell 1.7 percent to $182.4 billion and exports declined by 2.2 percent to $124 billion.
Imports from China fell to their lowest level since May 2006, with the trade gap dropping to $18.4 billion in February from January's $21.3 billion.
This week look for the Census Bureau's retail sales report April 16, and updates on the Consumer Price Index, housing starts and housing permits April 17.
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| Economic update - 04.09.07 |
Posted by Deb Brengman |
4/9/2007
10:24:07 AM |
Last Week in the News
The unemployment rate in March fell to 4.4%, matching a five-year low, the Labor Department reported April 6. Employers boosted their payrolls by 180,000 workers in March, the most since December. The figures suggest that companies are not feeling a need to restrict hiring in an economy that has otherwise shown signs of sluggishness.
New orders placed with U.S. factories rose by 1% in February, the Commerce Department said April 4. Economists were expecting a bigger 1.9% increase. Despite the lackluster showing, February's performance was a sharp improvement from the 5.7% plunge in new orders reported in January.
Meanwhile, the Institute for Supply Management (ISM) said its manufacturing index slipped to 50.9 in March, smaller than February's reading of 52.3 and Wall Street's expectation of 51. Any reading larger than 50 indicates growth for the sector.
Similarly, growth in the nation's service sector slowed, as the ISM's service sector index fell to 52.4 in March from February's 54.3 reading. The index also fell short of the 54.7 reading analysts had predicted.
For the week ending April 5, interest rates on 30-year mortgages nudged up, but still hovered close to their low for the year.
This week look for updates on the trade balance and Producer Price Index on April 13.
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