Economic Update: Things Are Looking Up.

On Tuesday, May 26, the Conference Board reported that its consumer confidence index rose to 54.9 in May from an upwardly revised 40.8 in April. It was the biggest increase in six years. Economists had expected an increase to 42.3. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.  

The Standard & Poor’s / Case-Shiller 20-city housing price index dropped 18.7% from March 2008 to March 2009. It was the second straight month the index didn't post record drops, indicating that the slump in home values might be easing. 

The National Association of Realtors said existing home sales rose 2.9% in April to a seasonally adjusted annual rate of 4.68 million from 4.55 million in March. Economists had expected an annualized rate of 4.66 million homes.  

Orders for durable goods, items expected to last three or more years, rose 1.9% in April after a revised lower 2.1% drop in March. This was the second increase in the last three months after having recorded six straight declines. Economists had anticipated orders for durable goods to rise only 0.5%.  

Initial claims for unemployment benefits fell by 13,000 to 623,000 in the week ending May 23 from a revised figure of 636,000 in the previous week. The number of people continuing to claim jobless benefits in the week ending May 16 rose to 6.78 million, a record-high figure for the 17th straight week.  

New home sales rose 0.3% in April to a seasonally adjusted annual rate of 352,000 from a downwardly revised rate of 351,000 in March. Economists had expected a sales pace of 360,000 units.  

Upcoming on the economic calendar are reports on construction spending on June 1, pending home sales on June 2 and factory orders on June 3.  

Provided by:

Judy Haller

Senior Loan Officer
Prospect Mortgage
3985 Prince William Co. Pky., Suite 104
Woodbridge, VA 22192
Office: (703) 590-7132