Economic Updates

Last Week in the News

Retail sales rose 0.5% in January, following a revised 0.1% decrease in December. Economists had anticipated retail sales to rise 0.3% in January. On a year-over-year basis, retail sales increased 4.7%.

Total business inventories unexpectedly fell 0.2% in December due to stronger than anticipated sales. Inventories had risen 0.4% in both November and October. The inventory-to-sales ratio fell to 1.26 in December. That’s below the pre-recession average of 1.28.

The trade deficit grew 10.4% to $40.18 billion in December from a $36.4 billion gap in November. Economists had expected the trade deficit to widen to $36 billion. Exports increased 3.3% to $142.70 billion, the eighth consecutive monthly gain. Imports rose 4.8% to $182.88 billion.

Initial claims for unemployment benefits fell by 43,000 to 440,000 in the week ending February 6. Continuing claims for the week ending January 30 fell by 79,000 to 4.538 million.

The Commerce Department said wholesalers cut their inventories by 0.8% in December following a 1.6% rise in November. Meanwhile, sales at the wholesale level rose 0.8% in December, marking the ninth straight monthly gain.

The Reuters/University of Michigan consumer sentiment index for February’s preliminary reading fell to 73.7 from January's final reading of 74.4. Economists had forecast a February reading of 75. One year ago, January’s final reading was 56.3. During the economic expansion that ended in December 2007, the index averaged 88.9.

Upcoming on the economic calendar are reports on the housing market index on February 16, housing starts and industrial production on February 17, and the index of leading economic indicators on February 18.

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