Last Week in the News
by Kera Beltram
The U.S. consumer price index rose 0.4% in January, higher than analysts’ expected 0.3% gain, the Commerce Department said February 20. The core index, which excludes food and energy costs, increased 0.3%, more than economists’ expected hike of 0.2%.
On the same day, the Federal Reserve released the minutes of its Jan 29-30 closed door meeting. At that session, the Fed lowered its growth forecast for the year from a range of 1.8% to 2.5% to a range of 1.3% to 2%, citing “further intensification of the housing correction, tighter credit conditions … ongoing turmoil in financial markets and higher oil prices.”
The Conference Board said on February 21 that its index of leading economic indicators — an important gauge of future economic activity over the next three to six months — fell 0.1% in January. With the decline, the leading index has fallen 2% over the last six months, the biggest decline since early 2001.
Meanwhile, the Federal Reserve Bank of Philadelphia, one of the 12 regional Fed banks, said on February 21 that its index measuring factory output contracted to minus 24.0, well below analysts’ forecast of minus 11.0. It was the weakest reading since the 2001 recession. Housing starts picked up 0.8% in January from December, the Commerce Department said February 20. However, building permits — an indication of future construction — fell 3%. Both reports were in line with expectations.
For the week, interest rates on long-term fixed mortgages rose, Freddie Mac reported February 21. Against this rising-rate environment, mortgage application volume tumbled 22.6% during the week ending February 15, according to the Mortgage Bankers Association. Refinance applications accounted for 61.7% of total applications.
This week look for an update on existing home sales on February 25 and the producer price index on February 26.
Economic data compiled from government reports and news services Bloomberg.com, msnbc.com, cnbc.com, cnn.money.com and Yahoo Economic Calendar.
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