Economic Week In Review

4. April 2008 by Ana Connell.

• NAPM Chicago Index showed a slight jump in orders, which was positive, but also showed a jump in prices, probably due to rising fuel prices.
• Motor Vehicle Sales were weak, lowest rate since 1996, Construction Spending was down but better than expected and ,ISM Manufacturing Index continued to slip and new orders are down.
• Challenger Job Cut Report, reported heavy job cuts in the government, financial and transportation sectors. Factory Orders fell more than expected .
• Monster Employment Index, rose slightly and Jobless Claims, posted worst numbers since Hurricane Katrina in 2005.
• Employment Situation(non-farm payrolls), much worse than expected as 80,000 jobs went away versus the expected 50,000..
• Bonds…2 year 1.82%, 5 yr. 2.62% and the 10 yr. 3.47%.

Between recession talk from Federal Reserve Chairman Ben Bernanke and the worst jobs report since 2003 it’s not looking pretty. At this point I’m not trying to be pessimistic at all, but you have to admit that the overwhelming evidence supports the fact that we are and have been in a recession for at least a few months.

I’m concerned in that a huge number of adjustable rate mortgage resets are still due to happen this year. You have several scenarios that can play out and one of them, due to the current environment of low rates, is that the resets will not be as bad as anticipated, in which case we just may be postponing the pain. Borrowers should use this time to see if they can negotiate new terms or refinance at a fixed rate. So far I’m not hearing warm and fuzzy stories about lender cooperation or major relief from the FHA. We’ll have to see what plays out if the number of short pays/foreclosures increases, which will probably be the case.

If you are looking to purchase a home, start your search, I think there will be some great deals going forward. If you own your home and have a neg am loan, start exploring your options…..a good place to start is Mortgage Town, sponsored by the National Consumer’s League, a nonprofit that educates consumers on a variety of issues.

The Economic Week Ahead:

• Consumer Credit(Monday)

• Pending Homes Index, FOMC Meeting Minutes(Tuesday)

• (Wednesday)

• International Trade, Chain Store Sales,Jobless Claims(Thursday)

• Import/Export Prices, Consumer Sentiment(Friday)

Have a great weekend!

Posted in Economic Market Reports, Blogroll | Print | No Comments »