Industrial Production: Production was down 0.2% in May. This is the fourth decrease in production in the last six months. Factories are utilizing 78.1% of their capability. This number is down 0.2% from last month. Manufacturing was also down the same amount. There’s a weakness in consumer goods and construction supplies. Mining is also down 0.3%, troubled by the problems that are hitting the energy sector. On the positive side, vehicle manufacturing was up 1.7% and durable goods gained 0.2%. Production numbers for April were revised down to a 0.5% drop.
Housing Market Index: The housing market index was up five points in its June reading, coming in at 59. This is the highest rating since September and equals the strongest reading of the recovery. Builders are confident of future sales, with that metric going up six points to 69. Present sales saw a seven point gain to 65. Traffic of first-time homebuyers continues to bring up the rear, but it’s up five points to 44. Regionally, there was market growth in the South, West and Midwest. The Northeast continues to shrink as a market for new homes.
Housing Starts: Housing starts came in at 1.036 million, down 11.1% from April. The decline is spread across the nation. However, this doesn’t look as bad when April was revised up to 1.165 million, meaning a 22.1% gain from March. Permits were also up 11.8% to 1.275 million in another positive sign. The gain in permits is concentrated in the Northeast and Midwest.
MBA Mortgage Applications: Applications were down 5.5% last week. Purchases fell 4.0% and refinances dropped 7.0%. A big part of this is an increase in rates. The average 30-year-fixed was up five basis points to 4.22%.
Consumer Price Index (CPI): Prices were up 0.4% in May. Most of the increase was tied to food and gasoline. Excluding these, prices rose a very slight 0.1%. The price of gas in particular rose 10.4%. This could have contributed to the 2.7% uptick in transportation costs brought on by rising airfare prices. Meanwhile, clothing prices were down 0.5% and education and communication were down 0.1%. Food and housing costs were flat. Prices are even with where they were at this time last year.
Jobless Claims: Initial claims were down 12,000 this week, coming in at 267,000. This contributed to the four-week average falling 2,000 to 276,750. Meanwhile, continuing claims were down 50,000 at 2.222 million. The four-week average is only 2,000 higher at 2.231 million.
In a welcome development, rates were either down or unchanged this week.
30-year fixed-rate mortgages (FRMs) averaged 4.00% with an average 0.7 point for the week ending June 18, 2015, down from last week when they averaged 4.04%. A year ago at this time, 30-year FRMs averaged 4.17%.
15-year FRMs this week averaged 3.23% with an average 0.5 point, down from last week when they averaged 3.25%. A year ago at this time, 15-year FRMs averaged 3.30%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 3.00% this week with an average 0.4 point, down from last week when they averaged 3.01%. A year ago, 5-year ARMs averaged 3.00%.
1-year Treasury-indexed ARMs averaged 2.53% this week with an average 0.2 point, unchanged from last week. At this time last year, 1-year ARMs averaged 2.41%.
The markets closed lower on Friday in part due to concerns over the situation in Greece.
The Dow Jones Industrial Average was down 99.89 points Friday to close at 18,015.95. Despite this, it was up almost 0.64% for the week. The S&P 500 was down 11.25 points to 2,109.99, gaining 0.76% on the week. The NASDAQ was up 1.30% last week despite losing 15.95 points Friday to close at 5,117.00.
The Week Ahead
Monday, June 22
Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.
Tuesday, June 23
Durable Goods Orders (8:30 a.m. ET) – Durable goods orders are based on the new orders placed with domestic manufacturers for factory hard goods.
FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing, using data provided by Fannie Mae and Freddie Mac. The House Price Index is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
New Home Sales (10:00 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month.
Wednesday, June 24
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
GDP (8:30 a.m. ET) – This measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.
Thursday, June 25
Personal Income and Outlays (8:30 a.m.) – This measures all possible income sources as well as expenditures of the public.
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
Friday, June 26
Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
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