Economic Updates

Last Week in the News

Retail sales increased 1.3% in November, following a downwardly revised 1.1% increase in October. Excluding automobiles, retail sales rose 1.2%, the largest gain since January. Sales of building materials increased 1.5%, the biggest gain since April 2008.

According to the Federal Reserve, consumer credit debt fell in October by $3.51 billion, an annual rate of 1.7%. Economists had forecast that consumer debt would drop $9.3 billion. That’s a sign the financial crisis is easing as more households cautiously increase their purchasing activity.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending December 4 rose 8.5% to 665.6. Purchase volume increased 4% to 241.5. Refinancing applications gained 11.1% to 3,185.9.

The Commerce Department said wholesalers increased their inventories by 0.3% in October. It was the first gain since August 2008, ending a record stretch of 13 monthly declines. Economists had anticipated a 0.5% drop. Meanwhile, sales at the wholesale level rose 1.2% in October, marking the seventh straight monthly gain.

The Commerce Department reported that the trade deficit shrank 7.6% to $32.9 billion in October from a revised $35.7 billion in September. Economists had expected a trade deficit to widen to $36.8 billion. The growth in U.S. exports is an indication the global economy is beginning to rebound.

Initial claims for unemployment benefits unexpectedly rose by 17,000 to 474,000 in the week ending December 5. Continuing claims for the week ending November 28 fell by 303,000 to 5.157 million.

The Reuters/University of Michigan consumer sentiment index for December rose to 73.4 from 67.4 in November. Economists had forecast a reading of 68.5.

Upcoming on the economic calendar are reports on the housing market index on December 15, housing starts on December 16 and the index of leading economic indicators on December 17.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pky., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132