Economic Roundup: May 24, 2010



In the News

New home construction was a mixed bag for the month of April, according to the Census Bureau, which reported last week that permits for private homes were at a seasonally adjusted annual rate of 606,000 for the month. This was 11.5 percent below March's revised rate of 685,000. Likewise, permits for single-family home constructions in April were at a rate of 484,000, which was 10.7 percent below March's revised figure of 542,000.
That said, while permits were down, starts on construction of private housing for April were at a seasonally adjusted annual rate of 672,000, which was 5.8 percent over March's revised estimate of 635,000. Also encouraging, starts on single-family homes in April were at a rate of 593,000, which was 10.2 percent over March's revised rate of 538,000.
The increase in starts marked an 18-month high and represented the second month in a row starts showed an increase, but the substantial drop in housing permits, the lowest rate in six months, led many experts to express concerns that any momentum in a housing recovery could be stalled out.
Consumer prices experienced a slight yet unexpected downturn during April, with the Bureau of Labor Statistics reporting last week that its Consumer Price Index for All Urban Consumers (CPI-U) dropped 0.1 percent in April, the first drop since March 2009. (Over the last 12 months, the index increased 2.2 percent, before seasonal adjustment.)
April's CPI-U drop beat economists' expectations of a 0.1 percent increase in the index. Various experts chalked up the decrease to the European debt crisis, which has stifled growth worldwide, as well as inflation stateside.
Another key contributor to the drop was in energy prices, with the Bureau's energy index declining 1.4 percent in April. The gasoline index fell 2.4 percent (after dropping 0.8 in March), and the index for household energy dropped 0.4 in April.
This week, watch for the latest updates on existing home sales (May 24) from the National Association of REALTORS®; consumer confidence (May 25) from the Conference Board; durable orders (May 26) and new home sales (May 26) from the Census Bureau; and the gross domestic product (May 27) and personal income and spending (May 28) from the Bureau of Economic Analysis.

Mark Ott

Loan Officer

W.J. Bradley Mortgage Capital Corp.

Office: 928-776-1980

Cell: 928-713-9639

Fax: 928-776-8866

NMLS: 189552

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