Economic Update (W/E 10/11)

Real Estate Agent with Century 21 Allstars

The U.S. non-manufacturing sector grew for the first time since August 2008. The Institute for Supply Management reported the monthly index of non-manufacturing activity rose to 50.9 in September from 48.4 in August. A reading above 50 signals expansion. Big gains were made in new orders, up more than four points to 54.2; backlog of orders, up 10.5 points to 51.5; and productivity, up nearly four points to 55.1.

According to the ICSC-Goldman Sachs index, retail sales rose 0.3% in the week ending October 3. On a year-over-year basis, retailers saw sales increase by 1%, the second-best showing in a year.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending October 2 rose 16.4% to 756.3, the highest level since May. Purchase volume rose 13.2% to 306.1. Refinancing applications increased 18.2% to 3,377.1.

According to the Federal Reserve, consumer credit debt fell for the seventh straight month in August by $12 billion, an annual rate of 5.8%. Economists had forecast consumer debt would drop $10 billion. Total consumer credit debt in August was $2.46 trillion.

Initial claims for unemployment benefits fell by 33,000 to 521,000 in the week ending October 3. The figure was lower than the 540,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending September 26 fell by 72,000 to 6.04 million.

The Commerce Department said wholesalers reduced their inventories by 1.3% in August, following a revised 1.6% drop in July. It was the 12th straight monthly decline. Meanwhile, sales at the wholesale level rose 1% in August, the largest increase since June 2008.

Upcoming on the economic calendar are reports on retail sales on October 14 and consumer inflation on October 15.

Comments (2)

Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~

I hope for our sake these aren't "spun" numbers.  I hope they are real and not just govt fictitious numbers.

Oct 14, 2009 12:36 PM
Mario Zavala
Century 21 Allstars - Downey, CA

Russ, these indicaters do provide a false glimpse of hope for recovery, if you actually look deeper or through those numbers I am sure that you might agree:

-Numbers are comps. over last year, which last years numbers were not good overall (most numbers from last years could be comped just by accident).

-Rise on Mortgage activity, well we know that is primarily the first time homebuyer trying to ensure their piece of the $8,000 pie before November 30th. (Remember Cash For Clunkers) 

-Unemployment claims down, that is mostly unemployed individuals whom have exhausted their claims(approximately 2 years w/ extensions). Doesn't necessarily mean that individuals were placed/found new jobs or that new jobs were created.

-Wholesalers reducing inventories, well if you have less inventory and continue to have mediocre sales, you end up achieving your planned GMROI (Gross Margin Return On Investments), Turns and your GM (Gross Margins). Making these numbers would look good on any ccompanies P&L.

All these numbers look good, the question here is "What Is Impacting" these figures and looking into them a little bit deeper to understand them. None the less, hope these numbers provided keep you informed and also questioning or looking deeper into them. Would love to hear your thoughts.

Mario Zavala

Century 21 

Downey, Ca. 

Oct 14, 2009 08:04 PM