ECONOMIC UPDATES

The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 3.2% in the final quarter of 2010. This follows a 2.6% pace of growth in the third quarter of 2010.

The Standard & Poor's/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — fell 1% in November after a 1.3% decrease in October. On a year-over-year basis, prices fell 1.6% compared with November 2009.

The consumer confidence index rose to 60.6 in January from an upwardly revised 53.3 in December. It was the highest level since May. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

New home sales rose 17.5% in December to a seasonally adjusted annual rate of 329,000 units from a revised rate of 280,000 units in November. Economists had expected a pace of 300,000 units.

Orders for durable goods — items expected to last three or more years — fell 2.5% in December after a revised 0.1% decrease in November. Excluding volatile transportation-related goods, orders posted a monthly increase of 0.5%.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 2% in December after a revised 3.1% increase in November. On a year-over-year basis, pending sales are down 4.2%.

Initial claims for unemployment benefits rose by 51,000 to 454,000 for the week ending January 22. Continuing claims for the week ending January 15 rose by 94,000 to 3.9 million.

Upcoming on the economic calendar are reports on construction spending on February 1 and factory orders on February 3.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pkwy., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132