Economic Update

Last Week in the News

On Tuesday, April 28, the Conference Board reported that its consumer confidence index rose 12.3 points to 39.2 in April. Economists had expected the index to increase to 29.5. It is the highest level since a November reading of 44.7 and is the largest jump since a gain of 13 points in November 2005. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Commerce Department announced Wednesday that gross domestic product — the total output of goods and services produced in the U.S. — decreased at an annual rate of 6.1% in the first quarter of 2009. This follows a 6.3% decline in the fourth quarter of 2008. It marked the worst two-quarter performance since 1957-58. One positive aspect to the GDP numbers was a 2.2% increase in consumer spending.

The Labor Department said initial claims for unemployment benefits fell in the week ending April 25 to 631,000 from the previous week's upwardly revised figure of 645,000. For the week ending April 18, the number of people continuing to claim jobless benefits increased 133,000 to 6.271 million.

The Reuters/University of Michigan consumer sentiment index rose in April to 65.1 from 57.3 in March. Economists had forecasted a reading of 61.9. It was the highest reading since September 2008 and the biggest one-month gain since October 2006. The index has rebounded significantly from a 28-year low of 55.3 in November 2008.

The Institute for Supply Management reported the monthly index of manufacturing activity rose in April to 40.1 from 36.3 in March. Though any reading below 50 signals contraction, it was the fourth consecutive monthly increase from a record low of 32.9 in December.

Upcoming on the economic calendar are reports on construction spending and pending home sales on May 4, consumer credit on May 7 and wholesale trade on May 8.

Information provided by:

Judy Haller 

Senior Loan Officer
Prospect Mortgage
3985 Prince William Co. Pky., Suite 104
Woodbridge, VA 22192
Office: (703) 590-7132