Economic Updates

Last Week in the News

The Institute for Supply Management reported the monthly index of manufacturing activity rose to 55.9 in December after reaching 53.6 in November. It was the fifth straight month of expansion and the fastest pace of growth since April 2006. A reading above 50 signals expansion.

The Commerce Department reported total construction spending fell 0.6% in November after dropping 0.5% in October. Economists had expected a decrease of 0.4%.

The Commerce Department reported factory orders rose 1.1% in November, more than double the 0.5% increase economists had anticipated. It was the seventh gain in the past eight months and follows a 0.6% increase in October.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, fell 16% in November, following a 3.7% increase in October. The decline was largely due to the tax credit for first-time homeowners that was set to expire but has since been extended and now includes move-up and repeat buyers.

The Labor Department reported that the unemployment rate was unchanged at 10% in December, even though employers cut 85,000 jobs. Payrolls for November were revised upward showing the economy gained 4,000 jobs. That was the first monthly gain since December 2007.

The Commerce Department said wholesalers increased their inventories by 1.5% in November. It was the biggest gain since October 2004. Economists had anticipated a 0.2% drop. Meanwhile, sales at the wholesale level rose 3.3% in November, marking the eighth straight monthly gain, and the largest increase since January 2008.

Upcoming on the economic calendar are reports on international trade on January 12, retail sales on January 14, and consumer inflation and industrial production on January 15.

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Judy Haller

Prospect Mortgage

3985 Prince William Co. Pky., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132