Last Week in the News

The National Association of Home Builders/Wells Fargo housing market index rose two points in February to 17. It was the first gain in five months. Economists had anticipated a dip to 14. An index reading below 50 indicates negative sentiment about the housing market.

The combined construction of new single-family homes and apartments in January rose 2.8% to a seasonally adjusted annual rate of 591,000 units. However, applications for new building permits, seen as an indicator of future activity, fell 4.9% to 621,000 units.

Industrial production at the nation’s factories, mines and utilities increased 0.9% in January, following an upwardly revised 0.7% gain in December. It was the seventh consecutive monthly increase. The overall factory-operating rate rose to 72.6% of capacity in January from 71.9% in December.

The producer price index, which tracks wholesale price inflation, rose 1.4% in January, following an upwardly revised 0.4% increase in December. Economists had expected a gain of 0.8%. The gains were largely due to higher energy costs.

Initial claims for unemployment benefits rose by 31,000 to 473,000 in the week ending February 13. Continuing claims for the week ending February 6 held steady at 4.538 million. Experts believe snowstorms in early February may have cost the economy as many as 100,000 jobs.

The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose a smaller-than-expected 0.3% in January after a revised 1.2% gain in December. It was the 10th straight monthly increase and the longest series of gains since 2004.

Consumer prices rose 0.2% in January. Excluding energy and food, the so-called core index unexpectedly slipped 0.1%, the first monthly decline since December 1982.

The Federal Reserve Board raised the discount rate charged to banks by a quarter-point to 0.75%.

Upcoming on the economic calendar are reports on the housing price index on February 23, new home sales on February 24, and existing home sales on February 26.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pky., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132

Last Week in the News

Retail sales rose 0.5% in January, following a revised 0.1% decrease in December. Economists had anticipated retail sales to rise 0.3% in January. On a year-over-year basis, retail sales increased 4.7%.

Total business inventories unexpectedly fell 0.2% in December due to stronger than anticipated sales. Inventories had risen 0.4% in both November and October. The inventory-to-sales ratio fell to 1.26 in December. That’s below the pre-recession average of 1.28.

The trade deficit grew 10.4% to $40.18 billion in December from a $36.4 billion gap in November. Economists had expected the trade deficit to widen to $36 billion. Exports increased 3.3% to $142.70 billion, the eighth consecutive monthly gain. Imports rose 4.8% to $182.88 billion.

Initial claims for unemployment benefits fell by 43,000 to 440,000 in the week ending February 6. Continuing claims for the week ending January 30 fell by 79,000 to 4.538 million.

The Commerce Department said wholesalers cut their inventories by 0.8% in December following a 1.6% rise in November. Meanwhile, sales at the wholesale level rose 0.8% in December, marking the ninth straight monthly gain.

The Reuters/University of Michigan consumer sentiment index for February’s preliminary reading fell to 73.7 from January's final reading of 74.4. Economists had forecast a February reading of 75. One year ago, January’s final reading was 56.3. During the economic expansion that ended in December 2007, the index averaged 88.9.

Upcoming on the economic calendar are reports on the housing market index on February 16, housing starts and industrial production on February 17, and the index of leading economic indicators on February 18.

Provided by:
Judy Haller
Prospect Mortgage
3985 Prince William Co. Pky., Suite 104
Woodbridge, VA 22192
Office: (703) 590-7132

Last Week in the News

Last Week in the News

The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 5.7% in the fourth quarter of 2009. It was the second consecutive quarter of growth and the fastest pace since the third quarter of 2003.

The Standard & Poor’s/Case-Shiller 20-city housing price index rose a seasonally adjusted 0.2% in November. It was the sixth consecutive monthly gain and follows a 0.4% increase in October. On a year-over-year basis, the gauge was down 5.3% from November 2008.

The consumer confidence index rose to 55.9 in January from an upwardly revised 53.6 in December. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

Existing home sales fell 16.7% in December to a seasonally adjusted annual rate of 5.45 million units from 6.54 million units in November. The drop was largely due to the anticipated expiration of a tax incentive for first-time homebuyers, which has since been extended and expanded. The inventory of unsold homes on the market fell 7% to 3.3 million, a 7.2-month supply at the current sales pace.

Orders for durable goods — items expected to last three or more years — rose 0.3% in December after a 0.2% increase in November. Excluding volatile transportation-related goods, orders posted a monthly gain of 0.9%.

New home sales fell 7.6% in December to a seasonally adjusted annual rate of 342,000 units from an upwardly revised rate of 370,000 units in November.

Initial claims for unemployment benefits fell by 8,000 to 470,000 in the week ending January 23. Continuing claims for the week ending January 16 fell by 57,000 to 4.6 million.

Upcoming on the economic calendar are reports on construction spending on February 1, pending home sales on February 2 and factory orders on February 4.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pky., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132