ECONOMIC UPDATES

Initial claims for unemployment benefits fell by 42,000 to 415,000 for the week ending January 29. Continuing claims for the week ending January 22 fell by 84,000 to 3.9 million. The unemployment rate fell to 9% in January from 9.4% in December.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending January 28 rose 11.3%. Refinancing applications increased 11.7%. Purchase volume rose 9.5%.

The Institute for Supply Management reported that the monthly composite index of manufacturing activity rose to 60.8 in January after reaching a revised 58.5 in December. A reading above 50 signals expansion. It was the 18th straight month of expansion and the highest reading since May 2004.

Factory orders rose 0.2% in December to a seasonally adjusted $426.8 billion, following a revised 1.3% increase in November. Excluding the volatile transportation sector, orders rose 1.7%.

The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity rose to 59.4 in January from 57.1 in December. A reading above 50 signals expansion. It was the 13th straight month of expansion in the services sector and the fastest pace since August 2005.

Total construction spending fell 2.5% to $787.9 billion in December, following a 0.4% increase in November. Economists had anticipated an increase of 0.2% in December.

Retail sales fell 1% for the week ending January 29, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 1.6%.

Upcoming on the economic calendar are reports on consumer credit on February 7, wholesale trade on February 10 and consumer sentiment on February 11.

Provided by:

Judy Haller

Prospect Mortgage

3985 Prince William Co. Pkwy., Suite 104

Woodbridge, VA 22192

Office: (703) 590-7132