September 15th, 2009 4:42 PM by Mel Samick
All twelve Fed districts showed positive improvements in almost all sectors, other than labor markets, construction and consumer spending. This clearly shows that the economic downturn is slowing down. It's primarily the labor market that is stopping the economy's upward progress. Even though some Fed districts show reasonable improvement in temporary hiring and fewer layoffs, the numbers aren't quite there yet to declare an economic turnaround. For the month of August, unemployment rose to 9.7 percent amid the positive news of weekly jobless claims coming in steady at 550,000, beating the market expectation of 560,000.
The stock market continued its upward climb this past week. For the week, all major indices ended up, gaining between 2 to 4 percent. The energy and industrial sectors led the market with a 4.2 percent gain, while the utility and defense sectors ended in the red this past week. In commodity trading, commodities saw a busy week. Rising commodities can be seen as another sign of optimism, as demand for commodities grows alongside the growth of the overall economy. An unexpected decline in weekly inventories of crude oil and unchanged output from OPEC helped oil prices rally this past week.
In another boost to investor's sentiment regarding the health of the global economy, the trade imbalance in July widened by $5 billion from June. Although it sounds like a negative statistic, it's actually positive, as both imports and exports increased. However, imports jumped by nearly 4.7 percent and exports rose by only 2.5 percent.
The Mortgage industry saw a surge in loan application volume as interest rates were coming back to the near-low levels of a few months ago. The Conforming Fixed 30 year rate was hanging out at around 5 percent while the Conforming Fixed 15 year rate was around 4.45 percent. Standard 5/1 ARM rates were around 4 percent. According to the MBAA for the week ending Sept 4th, application volume jumped by nearly 17 percent, while the refinance index surged by 22 percent.
The coming week will be busy with economic indicators, as investors will be speculating an inflation move with the Producer price index and Consumer price index releases on Tuesday and Wednesday respectively. Retail sales and Empire manufacturing on Tuesday will give some clues to investors on the future direction of the economy.