My Mortgage Blog

Mortgage News 09-04-2013

September 4th, 2013 11:54 AM by Nick Rapplean

Consumers are still feeling strong about the economy, but perhaps while buoyed by improving employment conditions, they are still keeping their purse strings taut, according to last week headlines.

Where employment was concerned, first time claims for unemployment insurance nearly hit a five-year low, with claims filed in the week ending Aug. 24 dropping to 331,000, a decline of 6,000 from the previous week's revised figure of 337,000, the Employment and Training Administration reported last week. The four-week moving average ticked up slightly to 331,250, a gain of 750 from the prior week's unrevised average of 330,500, which was the lowest since November 2007. The lowest initial claims been since they’ve been since the Great Recession began was on Aug. 10, which dropped to 322,000 claims.

The total number of Americans covered by unemployment insurance during the week ending Aug. 17 dropped to 2,989,000, a decrease of 14,000 from the preceding week's revised level of 3,003,000, the Administration also reported. The four-week moving average was 2,996,250, an increase of 9,500 people from the previous week's average of 2,986,750.

Looking at incomes and spending, personal income increased $14.1 billion in July (0.1 percent), and disposable personal income (DPI) increased $21.7 billion (0.2 percent), in July, the Bureau of Economic Analysis reported last week. Personal consumption expenditures (PCE; in other words, spending) notched up to $16.3 billion (0.1 percent). This was a considerable shit from the $64 billion gain (0.6 percent) in consumer spending for June.

Real disposable income (in other words, income after taxes) grew only 0.1 percent in July, in contrast to a decrease of 0.2 percent in June. Real PCE ticked up less than 0.1 percent, compared with an increase of 0.2 percent.

It could be that some of July’s spending money, went into the bank, instead. Personal saving — DPI less personal outlays — grew to $544.5 billion in July, compared with $541.2 billion in June. July’s personal saving rate — personal saving as a percentage of disposable personal income — hovered at 4.4 percent, the same as June’s.

This mixed bag of job news and spending news falls in line with last week’s consumer reports, which were also varied. The Conference Board reported that its Consumer Confidence Index, which had notched won in July, ticked back up in August. The Index for August hit 81.5 (a baseline of 100 was set in 1985), a slight gain over July’s 81.0.

The Board’s Present Situation Index, which describes how consumers feel about current economic conditions, dropped to 70.7 from 73.6. The Expectations Index, how they feel the economy will fare in the near future, grew to 88.7 from 86.0 last month.

While The Conference Board’s survey was up, the Thomson-Reuters and University of Michigan Survey of Consumers dropped from July’s 85.1, its highest level in six years, to 82.1 in August, a 3.3 percent decline. Compared to August 2012’s 74.3, August’s score was still 10.5 percent better than last year.

The Expectations Index — how consumers feel their economic circumstance will fare in coming months — declined to 73.7 in August from 76.5 in July. Compared to last year, it still outpaced August 2012’s 65.1. The Current Conditions Index — how they judge their current circumstances — dropped to 95.2 in August from 98.6 in July. Compared annually, this, too, was much better than August 2012’s 88.7.

Posted in:General

Posted by Nick Rapplean on September 4th, 2013 11:54 AM

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Mortgage News 09-04-2013

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