Initial Claims, MBA, GDP, Chain Deflator, FOMC
Initial Claims +11K to 308K. - A little cold
Inside the number: The number of people remaining on benefit rolls rose to 2.439M during the week ended June 10 from 2.421M.
MBA Mortgage Applications - Getting Chilly
Applications for mortgage loans at U.S. banks -6.7% last week to the lowest level seen on a seasonally adjusted basis since May 2002. The number of mortgage applications -31% compared with a year ago.
Applications for mortgages to purchase homes -6.2%, hitting the lowest level since November 2003. Purchase applications -19% in the past year. Applications for refinancing -7.5%. Refinance applications -47% in the past year.
The average rate for a 30-year fixed loan UP to 6.86% from 6.73% on a week-to-week basis; it's the highest rate since April 2002.
The spread between the rate on a one-year ARM and a 30-year fixed mortgage dropped to 50 bps, one of the narrowest in the past five years.
A narrow spread means buyers cannot reduce their monthly payment very much by choosing an adjustable-rate loan. No place to hide on those ARM bumps.
Q106 Final GDP +5.6%; GDP Deflator +3.1% - Hot for the haves, not so for the have nots.
Inside the number: a nominal 8.9% increase to the highest level in three years. Final sales +5.9% vs Q405 -0.2%. The have nots: Employees' share of national income fell to 63.5%, the lowest share since 1968.
The have nots are spending: Consumer spending was the main engine of growth in the quarter, rising at a 5.1% pace. Durable goods +20.3% vs -16.6% in Q405.
The haves: over the last year, Corporate profits +28.5% the fastest YOY growth in 22 years. Profits are at 14.4% of GDP, the largest % since 1950.
The haves are spending: Business investment +14.2% in Q106, the fastest growth in six years. Government spending +4.8%, federal spending +10.5%. Goods exports +18.5%, the biggest gain in nine years.
The big lie: GDP Deflator revised lower to 3.1% from 3.3%, core consumer price inflation measures were unrevised. Core consumer price inflation rose at a 2.0% annual rate vs Q405 +2.4%.
FOMC Statement: Status Quo
There are energy pass through and tightening economic slack inflation dangers, the housing market is cooling, we will firm if necessary based on the incoming data.
Inside the number: The number of people remaining on benefit rolls rose to 2.439M during the week ended June 10 from 2.421M.
MBA Mortgage Applications - Getting Chilly
Applications for mortgage loans at U.S. banks -6.7% last week to the lowest level seen on a seasonally adjusted basis since May 2002. The number of mortgage applications -31% compared with a year ago.
Applications for mortgages to purchase homes -6.2%, hitting the lowest level since November 2003. Purchase applications -19% in the past year. Applications for refinancing -7.5%. Refinance applications -47% in the past year.
The average rate for a 30-year fixed loan UP to 6.86% from 6.73% on a week-to-week basis; it's the highest rate since April 2002.
The spread between the rate on a one-year ARM and a 30-year fixed mortgage dropped to 50 bps, one of the narrowest in the past five years.
A narrow spread means buyers cannot reduce their monthly payment very much by choosing an adjustable-rate loan. No place to hide on those ARM bumps.
Q106 Final GDP +5.6%; GDP Deflator +3.1% - Hot for the haves, not so for the have nots.
Inside the number: a nominal 8.9% increase to the highest level in three years. Final sales +5.9% vs Q405 -0.2%. The have nots: Employees' share of national income fell to 63.5%, the lowest share since 1968.
The have nots are spending: Consumer spending was the main engine of growth in the quarter, rising at a 5.1% pace. Durable goods +20.3% vs -16.6% in Q405.
The haves: over the last year, Corporate profits +28.5% the fastest YOY growth in 22 years. Profits are at 14.4% of GDP, the largest % since 1950.
The haves are spending: Business investment +14.2% in Q106, the fastest growth in six years. Government spending +4.8%, federal spending +10.5%. Goods exports +18.5%, the biggest gain in nine years.
The big lie: GDP Deflator revised lower to 3.1% from 3.3%, core consumer price inflation measures were unrevised. Core consumer price inflation rose at a 2.0% annual rate vs Q405 +2.4%.
FOMC Statement: Status Quo
There are energy pass through and tightening economic slack inflation dangers, the housing market is cooling, we will firm if necessary based on the incoming data.
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