Market News Update - The Latest Figures to Come After Shutdown

The government shutdown is over. The latest figures are that $600 Million was lost in production and performance for the entire time the government was closed. Then, just in case you didn’t hear, the Obamacare website isn’t working properly and it cost more than $400 Million to be created.  Expert coders have reviewed the work on the site and unanimously have stated that the programming is “severely” flawed.

 With the government functioning again, the economic reports are starting to flow out to the public domain; however, they are slow in coming.  Some of the reports that have come out are listed below:

·        Mortgage rates have declined and, with that, refinance applications increased 3.0% in the prior week.  Applications for purchases declined 5.0% for the 3^rd straight week in a row.  The belief is that the government uncertainty had buyers sitting on the fence waiting for matters to be resolved.

·        The Housing Market Index which measures builder confidence is not quite as high as it was in August.  However, the readings are still the highest they have been in 10 years. 

·        First Time Jobless Claims came in at 358,000; however, the numbers are very skewed.  Between the government shutdown and an information backlog out of California the numbers are not considered to be very accurate for this week’s report.

Some of the other economic reports, which were due to be released are still delayed because of government workers just starting to get back to work.  The reports we are still waiting on from this week are Housing Starts, Industrial Production, and the Consumer Price Index.  Additional reports from last week that have yet to be released are Producer Price Index, Retail Sales and National Employment.

Given all the data that has not been released it is very difficult for anyone to effectively gauge the direction and strength of the economy.  However, with that said…prior to the shutdown the economy was continuing to improve at a modest pace and the likelihood of that direction changing during the government shutdown is minimal.  Experts are predicting that the government shutdown will reduce the 4^th quarter GDP numbers by ¼%.  This is not a very significant number, however some analysts believe that this drop could be enough to have the Fed delay any pull back in the stimulus program that has been talked about all year to start in November or December.

Next week’s market moving reports:

·        Monday October 21^st – Existing Home Sales

·        Wednesday October 23^rd - MBA Purchase Applications

• Thursday October 24^th - First Time Jobless Claims and New Home Sales
• Friday October 25^th – Durable Goods Orders and Consumer Sentiment

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 
Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

 

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