NMP Market Barometer: September 2009 Part II
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NMP Market Barometer: September 2009 Part II

September 18, 2009

A reading of "1" has the lowest impact on rates, while "10" has the highest. Although carefully verified, data are not guaranteed as to accuracy or completeness. BestInfo Inc. cannot be held responsible for any direct or incidental loss or liability incurred by applying any of the information or opinions in this feature.
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September 16
August Consumer Prices
Rate Impact: 7
The argument has been that “inflation is not a problem” at the present time. This is because the Federal Reserve historically has focused upon the Consumer Price Index (CPI) or the Personal Consumption Expenditures (PCE) index as the “gold standard” for determining the level of price inflation. But, the true “early warning” system of what lies ahead may be found in commodity prices. When they move into a bubble phase, there is likely to be trouble ahead. Currently, many economists are very worried about the stubbornly high level of oil prices in relationship to weakness in demand. And they are also concerned about the fact gold has remained in the area above $900 for a considerable period of time. While these commodities may be reacting to weakness in the dollar, that is also a major risk factor to a continuation of lower inflation levels.

September 24
August Existing Home Sales
Rate Impact: 8
The real estate sector has been on the rebound in recent months, with one-third of transactions related to the $8,000 federal tax incentive to first-time buyers. It is set to expire on Nov. 30, which is creating a powerful impetus to having a signed contract in hand by the end of this month. In fact, this could turn into a “Cash for Clunkers-style” frenzy as the deadline approaches. It has also been noted that the main sales push is at home prices below $250,000. The "move-up" market is reportedly very weak and jumbo loans remain hard to find at attractive rates. Therefore, when one looks at the home sales statistics, they have to be viewed in terms of this bifurcated marketplace. In other words, considerable additional progress will be required before the housing market can be declared to have recovered from its deep slump. New home sales will be released on Friday, Sept. 25.

September 24
Weekly Jobless Claims
Rate Impact: 6
The trend in new claims for state unemployment benefits has been relatively steady in the area near 566,000 for the past month. This is still well above the peak level of 400,000 seen in the previous recession of 2001. As for continuing claims, they have now declined to six million from what had been just shy of seven million earlier in the summer. While some optimists have said this shows the employment situation is improving, the skeptics say it is merely evidence that many folks have been losing their benefits without finding a new job. The continuing claims figure followed by most economists is the one which tracks payments for the standard 26-week period. Congress has extended benefits due to the length of the recession. But even those receiving the extra money are seeing their payments run out, which could lead to more hardship as the current year comes to an end.

September 29
September Consumer Confidence
Rate Impact: 5
A key barometer of attitudes about employment is found in the monthly consumer confidence data, because the surveys ask questions about whether jobs are hard to find or easy to obtain. While there was a small improvement in the August data, employers are remaining cautious. For one thing, some employers sought to avoid outright layoffs by cutting back on hours for existing workers. So, the first order of business in a recovery phase will be to restore those workers to true “full time” status. This may delay the hiring of new employees beyond what was seen in past recessions. Furthermore, there has been a strong trend toward engaging the services of temporary workers, just in case a double-dip recession takes place. These trends may further delay a drop in the national unemployment rate until any recovery has developed a full head of steam.

Compliance, Originations, Residential, Marketing, Secondary, Trends