Economic Week In Review

23. June 2008 by Ana Connell.

Of Note:

• Empire State Manufacturing Survey-second straight negative reading in two months indicating weak orders which in turn mean we are in a contracting business environment.

• Treasury International Capital report-Foreign investments rose and were strongest in treasury securities as foreign monies are not jumping into our stock market, at least at this point.

• Producer Price Index,jumped 1.4%, which the Fed will definitely be discussing in their meeting this week.

• Housing Starts, Starts fell 3.3% after an 8.2% increase in April and a sharp 13.8% drop in March. All this really shows is the volatility of multifamily housing.

• Industrial Production showed a decline, but overall the sector is flat.

• MBA Purchase ApplicationsThis number, which measures applications at mortgage lenders, was down 4.3%.

• The average 30 year fixed rate jumped 30 basis points to 6.57%.

• Jobless Claims , came in steady but still on the weak side.

• Leading Indicators, The economy is essentially stagnant with the figure coming in at .1%.

• Philidelphia Fed Survey–17.1%, this figure shows just how much manufacturing is suffering, with the Mid-Atlantic region showing the most weakness.

• quadruple witching did some damage on Friday as the Dow was down 220.40 points to 11,842.69

• Bonds…2 year 2.87%, 5 yr. 3.57% and the 10 yr. 4.15%.
• Crude oil closed at $134.89 per barrel.

Rough week all around, dominated by worries that more financial companies will be having further losses due to the subprime fallout and that oil will continue to go higher. The Fed meets this week so it’s safe to say the focus will probably be keeping inflation at bay and bolstering the dollar.

If you look at the figures above it’s safe to say the economy is stagnant, inflation is a major concern, but from a housing perspective it’s looking interesting. I say that because prices are down substantially from a few years ago and mortgage rates are starting to climb. As a buyer of real estate you need to carefully consider your carrying costs vs. getting the lowest price possible on a property. I think value needs to be the operative word, meaning if you find the dream home you have been looking for and it’s priced well for this market, consider putting in an offer before rates climb higher.

Have a great week!

The Economic Week Ahead:

• Consumer Confidence, FOMC Meeting Begins((Tuesday)

• New Homes Sales,MBA Purchase Applications, Durable Goods Orders, FOMC Announcement (Wednesday)

• Jobless Claims , GDP-Final, Exisiting Home Sales (Thursday)

• Consumer Sentiment, Personal Income and Outlays(Friday)

Have a great week!

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