Economic Updates

Last Week in the News

On Tuesday, August 11, the Labor Department said that productivity jumped at an annual rate of 6.4% in the second quarter of 2009. The increase was the biggest quarterly gain in nearly six years and follows a 0.3% increase in the first quarter.

The Commerce Department said wholesalers reduced their inventories by 1.7% in June, following a revised 1.2% drop in May. It was the 10th straight monthly decline. Sales at the wholesale level rose 0.4% in June and 0.2% in May. It was the first back-to-back increase in a year.

The trade deficit rose 4% to $27 billion in June, from $26 billion in May. Exports rose 2% to $125.8 billion, indicating that demand for American-made goods is picking up.

Retail sales unexpectedly fell 0.1% in July following an upwardly revised 0.8% increase in June. Economists had expected retail sales to rise 0.7% in July.

Initial claims for unemployment benefits rose by 4,000 to 558,000 in the week ending August 8. The figure was higher than the 545,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending August 1 fell by 141,000 to 6.2 million.

The Federal Reserve reported that industrial production at the nation’s factories, mines and utilities rose for the first time in nine months. The 0.5% increase in July followed a 0.4% decrease in June. The overall factory-operating rate rose to 68.5% of capacity in July, up from a record low of 68.1% in June.

The Reuters/University of Michigan consumer sentiment index for August fell to 63.2 from 66 in July. Economists had forecast a reading of 69.

Consumer prices were unchanged in July, and for the year are down 2.1%, the biggest decline since 1950.

Upcoming on the economic calendar are reports on the housing market index on August 17, housing starts on August 18 and existing home sales on August 21.

Judy Haller

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