Week in Review

[Adam in CO]

Monday, June 26th New home sales advanced 4.6% in May to a seasonally adjusted annual rate of 1.234 million units compared to expectations for a decline to a rate of 1.150 million. This third straight monthly increase brings new home sales to their highest level since December 2005. Despite the upside surprise in the past several months, demand for new housing has passed its peak and is still trending modestly lower. Housing fundamentals suggest that new homes sales will begin to retreat once again after the spring/summer selling season. Tuesday, June 27th Sales of existing homes fell 1.2% in May to an annual rate of 6.67 million. Total existing home sales including single family, townhomes, condos and co-ops, continue to soften and remain 6.6% lower than year ago levels. While existing home sales continue to trend modestly lower they remain very healthy. Housing activity has normalized with a more balanced supply range. Consumer confidence increased to 105.7% in June from a reading of 104.7% in May. The boost in confidence levels was due to higher expectations. Ratings of the present situation slipped last month. Consumer attitudes rebounded in June, surprising given higher gas prices and a correction in the stock market. These factors and slower economic growth could put confidence levels at risk but expectations are for confidence to remain range bound this year. Wednesday, June 28th The MBA mortgage applications index fell 6.7% to 529.6% for the week that ended June 23. Both purchase and refinance applications volumes fell last week. This was the lowest level of mortgage activity since May 2002. Mortgage applications have been trending lower since the middle of last year and are now 32% below their year ago level. Thursday, June 29th The FOMC raised its target for the fed funds rate by a quarter point to 5.25% today, as widely expected. This was the seventeenth straight increase in as many meetings. The fed funds rate now stands at its highest point since March 2001. The Committee stated that the moderation in economic growth currently underway should help to lower some of the inflationary risks. They will continue to evaluate incoming data to determine the risks and respond with additional firming if necessary for the attainment of both near potential economic growth and limited inflationary pressures. Economic growth was upwardly revised to 5.6% in the first quarter compared to 5.3% in the preliminary estimate. Stronger capital spending and residential construction boosted growth in the final revision. Q1 GDP turned out to be much stronger than originally reported but weakened significantly toward the end of the quarter. Early estimates are for a 2.5% rate of growth in Q2. Jobless claims rose 4k to 313k for the week that ended June 24. Despite recent volatility claims have settled back into the lower range of earlier this year. The level of claims is consistent with solid labor market conditions and stronger monthly payroll growth in June. Another Fed rate hike with the possibility of more ahead placed upward pressure on mortgage rates this week. 30-year fixed rate mortgages averaged 6.78% this week compared to 6.71% last week according to Freddie Mac's mortgage market survey. Economists expect the housing market to continue an orderly cool down and longer term rates to average around 7.0% at the end of this year. Friday, June 30th Personal income rose 0.4% in May better than expected but slower than April's 0.7% increase. The increase was led by gains in transfer payments and proprietors' income. Wages and salaries were flat last month. Consumer spending was up 0.4% in May led by spending on nondurable goods. A closely watch inflation gauge contained in this series, the core PCE deflator, was up 0.2% on the month and 2.1% on the year, still moderate and unchanged from the previous period.
Stock Market Close for the Week Index Latest A Week Ago Change DJIA 11150.22 10989.09 +161.13 or +1.46% NASDAQ 2172.07 2121.47 +50.60 or +2.38%

WEEK IN ADVANCE Several first tier data releases will continue to feed the economic and interest rate outlook. Look to the ISM index, which tracks national manufacturing activity, on Monday and the June employment report on Friday for the latest print on the economy's performance. Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Prime Rate 8.25 7.25 6.00 Fed Discount 6.25 5.25 4.00 Fed Funds 5.31 4.22 3.11 11th District COF 3.759 3.074 2.515 10-Year Note 5.14 4.37 3.97 30-Year Treasury Bond 5.18 4.54 4.21 30-Yr Fixed (FHLMC) 6.78 6.22 5.53 15-Yr Fixed (FHLMC) 6.43 5.76 5.12 1-Yr Adj (FHLMC) 5.82 5.15 4.24 6-Mo Libor (FNMA) 5.6382 4.6901 3.6914

Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

[CO Hummer]

Originally Posted by Adam in CO

the core PCE deflator, was up 0.2% on the month and 2.1% on the year

Are these better that Staun's?

And the reader's digest version is????

Let the economists translate this, since they still get paid when totally wrong.

S.

[KenP]

Thanks for the update, Amanda. Could you please post this info on Monday's from now on. I'm late on my info and lost a few bucks because of your tardiness.