Economic Update June 11th, 2007
Last Week in the News
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The U.S. trade deficit -- the gap between what America sells abroad and what it imports -- totaled $58.5 billion in April, a 6.2% improvement over the March deficit, the Commerce Department reported June 8. Record-high exports of $129.5 billion, reflecting strong sales of soybeans and other farm products, commercial aircraft and industrial machinery, helped shrink the gap.
The nation's service economy showed surprising strength as the Institute for Supply Management (ISM) said June 5 that its index of business activity in the non-manufacturing sector registered 59.7 in May, higher than April's reading of 56 and Wall Street's expectation of 56 for May. A reading above 50 indicates expansion.
A better-than-expected service economy underscored comments by Federal Reserve Chairman Ben Bernanke to a June 5 international money conference that the U.S. economy will rebound from an anemic performance at the start of the year to a "moderate pace" in coming quarters. On the mortgage front, he added, "We must walk a fine line: We have an obligation to prevent fraud and abusive lending; at the same time, we must tread carefully so as not to suppress responsible lending or eliminate refunding opportunities for subprime borrowers."
Meanwhile, mortgage rates rose a sixth straight week to their highest levels in 10 months, Freddie Mac reported June 7. Analysts attributed the rise to an improving service economy and low unemployment, resulting in a growing competition and higher-wage (inflationary) environment for workers.
This week look for updates on the Producer Price Index on June 14 and the Consumer Price Index on June 15.
Thank you,
Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
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Posted by Jason Lash at 10:25 AM
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