Economic Update

Last Week in the News

On Tuesday, May 12, according to the ICSC-Goldman Sachs index, store sales rose 0.3% in the week ending May 9 compared to the previous week. Compared to a year ago, retail sales were up 0.5%. That is the best year-over-year reading since late November 2008.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending May 8 decreased 8.6% to 895.6 from the previous week. However, the index is up 28.4% compared with the same week one year ago. Purchase volume rose 0.5% to 265.7, while refinancing applications jumped 11.2% to 4,588.6 for the week ending May 8.

Wholesalers reduced their inventories by 1% in March. It was the seventh straight monthly decline. Sales at the wholesale level fell 1.6% in March, leaving the stock-to-sales ratio unchanged at 1.44.

On Thursday the Labor Department reported the producer price index, which tracks wholesale prices, rose 0.3% in April. For the year, wholesale prices have dropped 3.7%, the biggest 12-month decline since 1950. Consumer prices were unchanged in April, and for the year are down 0.7%, the biggest decline since 1955.

Initial claims for unemployment benefits rose to 637,000 from the previous week's upwardly revised figure of 605,000. The number of people continuing to claim jobless benefits rose to 6.56 million, a record-high figure for the 15th straight week.

The Reuters/University of Michigan consumer sentiment index for May rose to 67.9 from 65.1 in April. Economists had forecast a reading of 67.

The Federal Reserve reported that industrial production at the nation’s factories, mines and utilities fell by 0.5% in April compared to a 1.7% decrease in March. Economists had expected a decline of 0.6%.

Upcoming on the economic calendar are reports on the housing market index on May 18, housing starts on May 19 and jobless claims on May 21.

 Information Provided by:

Judy Haller

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