A market watch update from Jay Skwierawski for the week of August 30, 2009
Economic Calendar for the Week of August 31 - September 04
Good morning everybody!
Mortgage rates improved ever so slightly last week.
In the news last week:
On Tuesday, Consumer Confidence showed an increase from 47.4 to 54.1, which was much higher than the 48.0 that was estimated. Consumer confidence reports are watched closely, as a happy consumer is a buying consumer, and a buying consumer helps to pick up the rest of the economy. On Wednesday, we learned that Durable Goods Orders (items that are expected to last 3 or more years) came in with an increase of 4.9 percent in July, much better than June's decrease of -1.3 percent and better than the +3.2 percent increase that was expected. A lot of this increase might be attributed to the governments "Cash for Clunkers" program, as many car buyers purchased new cars to take advantage of the $3,500 to $4,500 that the government was offering. New Home Sales increased to 433,000 in June, also higher than the 395,000 from the month before and the 390,000 that was expected. Thursday's report on the Gross Domestic Product showed the economy slowing by 1.0% in the second quarter. This report was better than expected, but still showed the economy slowing for the fourth quarter in a row - the first time that has happened since the Great Depression (sorry I had to report that). First Time Unemployment Claims showed improvement over the week before's numbers, but came in higher than expectations. Hopefully this is a trend that won't continue, as the positive employment numbers the past couple of months have been fueling some of the hope that is in the markets. Friday brought word that Personal Income was flat in July, better than the decrease we saw in June, but below expectations of a slight increase. Personal Spending, on the other hand, came in with a slight increase, just as expected. It was the third increase in a row for consumer spending. Hopefully this increase wasn't all a result of Cash for Clunkers. The University of Michigan's Consumer Sentiment Index came in as expected. Finally, the Federal Reserve's favorite gauge of inflation - the Personal Consumption Expenditure Index came in showing that inflation remained tame last month with a 1.4 percent year over year increase, the smallest rise since September, 2003. In addition to the economic news, the treasury bond auctions went off successfully last week, with foreign interest in our bonds coming in higher than expected.
Taking a look at the economic news expected this week, we can see a pretty full calendar. News out this morning on the Chicago Purchasing Manager's Index shows that the economy in the Chicagoland area is at an even level. A reading below 50 indicates a slowdown in activity, while a reading over 50 indicates an increase in activity. The index came in at 50, which is a positive sign for the local economy. Later this week, we will see similar reports on the economy on a national level, and we will finish the week with the all important employment numbers from August. The markets are anticipating a slightly mixed report - a small uptick in the unemployment rate and a decrease in the number of jobs lost in the month. The monthly jobs report is often times a market mover, and the fact that it comes the day before a three day weekend may increase its affect on the market, as many market players will be stretching the three day weekend into a four day weekend and taking the day off. A decrease in trading typically exaggerates market movements one way or the other. Stay tuned! Above is the list of economic reports to expect this week.
We will keep an eye on the markets, and keep you posted on any major developments! Have a great week, and go sell some homes and condos! Please call on my if I can assist you or your buyers in any way!
Thank you.
Jay Skwierawski
President
First Sterling Mortgage Services, LLC
737 North Michigan Avenue, #1900
Chicago, IL 60611
312.268.7601
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