The Weekly Rap! Friday June 20th, 2014

The National Debt is currently: $17,538,072,962,587.00 is Higher by about 6 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,947 about 200pts higher than where it was a week ago.  The S&P 500 is trading at 1,962.  Gold is trading at $1,314 an ounce, while oil futures at $106.62 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.79/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 105.50 about .30 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.   

In economic news this week; The reader’s digest version is inflation is higher, layoffs are lower, manufacturing is steady, and there were no surprises of major changes from the Fed at their regular meeting.

The Federal Reserve Bank of New York reported this week that Manufacturing activity in their “Empire State” general business conditions index basically held steady in June after hitting an almost four-year high in May. The Philadelphia Fed’s manufacturing index jumped to a reading of 17.8 in June from 15.4 in May. This is the highest reading of activity since last September.

Industrial production bounced back in May, according to Federal Reserve which also showed that April output wasn’t as bad as initially estimated. Production climbed 0.6% in May, after falling 0.3% in April and rising 0.8% in March.

Signaling that economic growth could pick up in coming months, the leading economic index for the U.S. rose 0.5% in May to 101.7, the Conference Board reported. “Recent data suggest the economy is finally moving up from a 2% growth trend to a more robust expansion,” said Ken Goldstein, economist at the Conference Board, in a statement.  I want to be an economist when I grow up.  They get paid to guess and whether they’re right or wrong, kind of like the weather man.

Consumer prices, CPI, rose sharply in May for the second straight month and the rate of inflation over the past year reached its highest level since late 2012, an upward trend that could worry the Fed Gods unless it pulls back soon.  The consumer price index jumped 0.4% last month following a 0.3% gain in April, the Labor Department said Tuesday.  Annualized over the past 12 months, consumer inflation is at 2.1%.  Just eight months ago, inflation was running at just a 1% pace.  

The Fed has been aiming to boost inflation to around 2% or so from what it considered an economically damaging low level, but the sudden surge could set off alarm bells. While I doubt that it will, this could cause “market” concern that the Fed might be forced to raise interest rates earlier than it planned.  Excessive inflation appears unlikely in the absence of stronger growth, further tightening in labor market conditions, and greater pressure on wages.  Historically speaking, on an annual basis inflation is still very low. Once annual inflation gets above 5% it becomes extremely troublesome for the economy. But with inflation so low in spite of the Fed’s efforts to print money some are saying that Deflationary forces are stronger than the Fed.  Long term average inflation is about 3.2.  The core CPI, which excludes volatile food and energy costs, rose by 0.3%, the biggest gain since August 2011. The cost of housing, new cars, airline tickets, medical care and prescription drugs all increased.

inflation_by_decade_sm   Housing starts May 2014

On the Real Estate front:  Home builders’ confidence rose four points to 49 in June, the highest level in five months, but respondents were still a bit pessimistic, according to the National Association of Home Builders/Wells Fargo housing-market index released Monday.  The index has been below 50 since February, indicating that builders, generally, are pessimistic about sales trends. “Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase. Builders are reacting accordingly, and are moving cautiously in adding inventory,” said David Crowe, NAHB’s chief economist. Construction on new homes fell by 6.5% in May and builders trimmed plans for future projects in another sign that a hoped-for spring revival in the housing market remains elusive.

On the Employment front:  With layoffs at very low levels and more jobs available, the number of Americans seeking unemployment benefits continues to hover near a post-recession bottom.  Initial jobless claims declined by 6,000 to 312,000 in the week ended June 14.   Yet despite the decline in jobless claims, millions of Americans still cannot find work and the number of long-term unemployed remains higher now than at any time before the 2007-2009 recession struck.  The unfinished recovery in the labor market is the chief reason why the Fed plans to keep interest rates low for the foreseeable future, a point reiterated by Chairman Janet Yellen on Wednesday after the bank’s latest gathering in Washington.

The economy has now recovered all the jobs it lost from the Great Recession. It’s only taken seven years.  Industrial production is now higher.  But consumer confidence is, depending on your measure, somewhere between 10% to 25% below its 2007 peak.  It turns out; Fed Chairwoman Janet Yellen feels pretty much the same way as other Americans. For example, this is what the world’s most powerful central banker had to say Wednesday when asked if, finally, she’s confident the economy is running above its long-run potential.  “When you say confident, I suppose the answer is no, because there is uncertainty,” she said. Yes, she continued, there’s accommodative policy from her Fed, there’s diminished fiscal drag, easing credit conditions, improving household debt finances, rising home prices, rising equity prices. But she returned to the word “uncertainty,” and it didn’t seem like just obligatory caution.

In the Fed’s statement following their meeting on Wednesday, Yellen was more kitten than lion, sticking to her guns that the central bank can hold short-term interest rates steady until the middle of next year and then raise them gradually, and downplaying recent strong inflation readings.  As expected, the central bank trimmed bond purchases by another $10 billion, staying on track to end its long-running stimulus program before the end of the year. This is the fifth straight meeting with a $10 billion cut in the asset purchases. The Fed will now buy $35 billion a month in Treasuries and mortgage-related assets, starting in July.  At the same time, the Fed lowered its forecast for “longer run” interest rates to 3.75% from closer to 4%. The last change is important because it signals the central bank won’t push up interest rates all that high during this recovery phase.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday June 13th, 2014

The Weekly Rap will be getting out a bit later as I have taken on another endeavor.  Many of you know that I also have another passion, food and cooking.  I have taken the position as new Chef at the Bass Lake Golf Course Bar & Grill.  Please know though, that my main focus is still being a Mortgage Advisor.  We currently serve just breakfast and lunch and have room for 50+ on the beautiful outdoor patio and 38 inside.  I will be revamping the menu so stay tuned…

The National Debt is currently: $17,531,034,962,587.00 is Higher by about 7 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,775 about 200pts lower than where it was a week ago.  The S&P 500 is trading at 1,936.  Gold is trading at $1,276 an ounce, while oil futures at $106.77 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.81/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 105.20 about .40 worse than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.   

In economic news this week;  The reader’s digest version is the economy continues to plug along, Small Business owners are more optimistic, Retail Sales continue to plug higher, Wholesale prices are lower, and home listings locally are much higher than last year.

Small-business owners have recovered all of the optimism lost during the Great Recession, according to a report released this week. The higher level of confidence is feeding into price increases.  The National Federation of Independent Business’s small-business optimism index increased again to 96.6. last month, from 95.2 in April. The May reading is the highest since September, 2007, before the last recession.  The improvement though, while welcome, is far below readings that normally accompany an expansion.

Our government recorded a budget deficit of $130 billion in May, which is 6% lower than in the same month last year.  For the fiscal year to date, Our government has spent $436 billion more than it’s taking in.  It is though 30% lower than the same period in fiscal 2013. The deficit hit a record of $1.4 trillion in 2009.

Retail Sales rose 0.3% last month on strong demand for cars, trucks and home-improvement products, but spending tapered off at most other retailers after a big bump in demand in April.  Despite the mixed report, the pace of sales in April and May taken together reflect an economy growing at a moderate pace in the spring after the U.S. suffered a sharp contraction in the first quarter. Retail sales account for about one-third of consumer spending, the main engine of economic activity.

Retail Sales May 2014

Prices at the Wholesale level (PPI) unexpectedly sank in May, as prices dropped across the board, easing concern that inflation pressure might be stirring in the pipeline.  The producer price index dropped 0.2% after rising 0.6% in April and 0.5% in March, the Labor Department said. The Federal Reserve has actually been trying to nudge inflation higher. They were caught off guard by the weak inflation seen last year and have been heartened by signs that inflation is stabilizing in the past few months. But Fed officials pay much more attention to the personal consumption expenditure index, which measures prices consumers pay.

Consumer sentiment declined to an early June reading of 81.2, the lowest level in three months, from a final May level of 81.9, according to the University of Michigan and Thomson Reuters report. Economists watch sentiment levels to get a feeling for the direction of consumer spending.

On the Real Estate front:  For the El Dorado Hills/Cameron Park/Shingle Springs areas: From April to May New listings are higher by 14% and higher by 81% over this time last year.  Average price per Sq/Ft is about the same from a month ago but higher by 10% from a year ago.  As you could probably guess the average-days-on-market is higher due to increased inventory.  The average sold price is $552,000 vs. $473,000 just a year ago. 

On the Employment front:  Job openings rose 7.2% to 4.46 million in April, the most since September 2007, the U.S. Department of Labor reported Tuesday.  Compared with same period in the prior year, April job openings rose 17%, as private-sector openings increased 18%.  With 9.75 million unemployed people in April, there were about 2.2 potential job seekers per opening.  In April 2013, there were 11.68 million unemployed people — about 3.1 potential seekers per opening.  When the recession began in December 2007, there were less than two potential job seekers per opening. The total number of hires remained at 4.71 million. The level of hires was almost 5 million when the recession began.

The number of Americans who applied for unemployment benefits last week increased slightly but remained near a post-recession bottom, indicating little change in a gradually improving U.S. labor market.

Please check out my Blog site: BartoksBlog “Food, Wine and Finance; Recipes for success” at http://www.bartoksblog.com 

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

 

The Weekly Rap! Friday May 30th, 2014

The National Debt is currently: $17,518,115,962,587.00 is lower by about 10 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,667 right about where it was a week ago.  The S&P 500 is trading at 1,917.  Gold is trading at $1,245 an ounce, while oil futures at $102.64 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 105.80 about .30 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.   

In economic news this week; “Economics: The science of explaining tomorrow why the predictions you made yesterday didn’t come true today.”  The reader’s digest version is the economy is plugging along, the economy contracted in the first quarter for the first time in three years, Consumer confidence is a bit higher, home prices are higher,

Millennials are going to make major shifts in corporations over the next decade and most people aren’t ready for the amount of change that’s coming.  By 2025, Millennials will account for 75% of the global workforce and by next year, they will account for 36% of the American workforce. At some companies like Accenture and Ernst & Young, they already account for over two thirds of the entire employee base.  The Millennials like the Baby Boomers are very likely to shape many things to come just as their parents did.  To be continued…

The largest Navy ship-building contract ever boosted orders for durable goods in April, but demand for long-lasting civilian items such as personal computers and appliances slowed a bit after surging in the prior month.  Orders for long-lasting goods rose 0.8% in April, propelled by the biggest burst of orders for defense equipment since December 2012.  The Navy placed a $17.6 billion order in late April for 10 nuclear-powered submarines.  Are the ones we have wearing out or are we planning an invasion somewhere?  The durables report is often quite volatile and subject to large revisions.  Business investment has repeatedly faltered since the recovery began in mid-2009 and the question in whether companies are ready to sustain a faster pace of spending after years of frugality.

The economy contracted in the first quarter for the first time in three years, hampered by harsh weather that disrupted business and slowed construction. Yet the damage seems to be fading fast amid widespread signs that growth has accelerated in the spring.  Gross domestic product, or GDP, the sum of all goods and services produced by the economy, shrank by annual pace of 1% in the first three months of 2014, the Commerce Department said. Initially the government had reported last month that GDP rose at 0.1% rate.  GDP is anticipated to snap back with a 3.8% gain. 

The Conference Board said its consumer confidence index in May rose to 83 from 81.7 in April.  Both the present situation and future expectations indices also advanced.  While there is a real pickup in consumer confidence, six years out from “the Great Recession,” sentiment is still at very weak levels.  Those who plan to buy a home within six months fell to 4.9% in May, the lowest since July 2012; that compares with a percentage of 5.6% in April and as high as 7.4% in December.    

Consumer spending slipped 0.1% in April, the first decline in a year, as we cut back on car purchases and spent less on utilities such as natural gas and electricity as the weather warmed up.Just one month earlier, consumer spending jumped by a revised 1%, reflecting the largest increase since 2009.  A large chunk of the increase in spending in March, and most of the decline in April, was tied to changes in what we paid for utilities. We spent less to heat and power our homes in April than we did in March.

Personal incomes, meanwhile, rose 0.3% in April.  Adjusted for inflation, disposable income rose 0.2% last month.  Disposable income is mainly the money left over after taxes and an increase typically foreshadows an rise in consumer spending. Yet over the past 12 months disposable income has risen just 2%, a rate that needs to rise if the economy is going to grow much faster.

Consumer sentiment May 30, 2014 GDP Q1 2014

On the Real Estate front:  Home prices rose 0.9% in March, the first increase in five months, but annual growth is slowing down a bit.  Including March’s gain, prices across the 20 cities were still about 19% below a 2006 peak.  Year-over-year home prices were up 12.4% in March. Going forward home prices are expected to continue to slow down as inventories expand.  Both the number of new single-family homeson the market, as well as existing homesavailable for sale, rose in April, according to reports released last week.  Here locally in El Dorado Hills, Cameron Park and Shingle Springs as far as new listings go this month May 1 through 29 we had 139 new listings.  Current inventory is 336 homes listed for sale (per MLS).  Last year in the same time period there were 201.

The National Association of Realtors reported that pending home sales rose 0.4% in April, the second consecutive gain after slumping since the summer, signaling that sales of existing homes may pick up. The index of pending home sales hit 97.8 in April compared with 97.4 in March. Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence.  Despite April’s gain, the gauge was down 9.2% from a year earlier, hit by few homes available for sale and pricier properties. An index reading of 100 equals 2001′s average contract activity level.  Here locally pending sale increased 9.8% from March to April.

On the Employment front:  The number of people applying for unemployment benefits sank last week to the second-lowest level since the recession ended in mid-2009, suggesting continued improvement in a labor market that’s perked up in the early spring.  Initial jobless claims fell by 27,000 to 300,000 in the week ended May 24, the Labor Department saidThursday. 

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday May 23rd, 2014

The commentary is a bit late today due to me having two separate signings this morning and one of them that almost funded in the same day.  It’s been a busy morning.  I hope all of you have a wonderful Memorial day weekend!

The National Debt is currently: $17,528,071,962,587.00 is higher by about 8 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,606 right about 175 points higher than where it was a week ago.  The S&P 500 is trading at 1,900.  Gold is trading at $1,292 an ounce, while oil futures at $104.39 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 105.53 about .20 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.   

In economic news this week; The reader’s digest version is the economy is plugging along, existing home sales are positive, and the Fed Gods are at the podium again.

Existing Home Sales Apr 2014Jobless Claims 5-22-2014Millennials are starting to age into their prime spending years

Ninety percent of Millennials frequently used the internet to search for homes compared to less than half of Silent Generation buyers. Younger generations of buyers were also more likely to find the home they purchased through the internet; older buyers most often learned about the home they purchased from their real estate agent.
The Millennials like the Baby Boomers are very likely to shape many things to come just as their parents did.  To be continued…

The Fed Gods examined “several approaches” for the eventual tightening of monetary policy but only decided to be flexible, according to the minutes from the April meeting released Wednesday that suggested that the time for higher interest rates is drawing closer.  They emphasized the need for base decisions on experience because of the unprecedentedly large size of the central bank’s balance sheet.  According to the minutes, a number of Fed officials said it would be important for the Fed to “communicate still more clearly about the Fed’s policy intentions as the time of the first increase in the federal funds rate moves closer.” Several of the Fed Gods were at the podium this week speaking on the very same topic.

Charles Plosser, president of the Philadelphia Fed. In a speech Tuesday in Washington said “The U.S. economy is likely to grow at an accelerating pace in the second half of 2014 and into next year, possibly requiring the Federal Reserve to begin raising interest rates sooner rather than later.” Plosser reaffirmed his view that the economy will continue to strengthen over the next year. He said a more rapid pace of hiring might lower the unemployment rate, now at 6.3%, below 6% by the end of 2014. He also said he’s optimistic the housing market will bounce back after a recent drop in sales.

William Dudley, the president of the New York Fed, told the New York Association for Business Economics that “The Federal Reserve will take its time lifting interest rates” and that that there will be “a considerable period of time” between the end of its asset purchases (in the fall, he says) and the first rate hike. He said the trajectory of hikes will “probably be relatively slow” – but that depends both on how the economy perform and how financial conditions respond to tightening.  He expects the level of rates over the longer-term to be “well below” the historical average of 4.25%.

Fed Chairwoman Janet Yellen on Wednesday delivered what you’d expect from a commencement speech: graduates, she said, should “tend the fires of curiosity,” listen to others, and show grit in the face of failure. Yellen reminded New York University students in Yankee Stadium that even Babe Ruth, Lou Gehrig and Joe DiMaggio failed most of the time they stepped to the plate, according to a text of her remarks.

The leading economic index (LEI) rose 0.4% in April to 101.4, the Conference Board reported. “Despite a brutal winter which brought the economy to a halt, the overall trend in the leading economic index has remained positive,” said Ken Goldstein, economist at the board.  

Economic growth moderated in April, according to the Chicago Fed national activity index released Thursday. The index fell to negative 0.32 in April from positive 0.34 in March. However, the three-month average rose to 0.19 from 0.04 in March — the highest level since November 2013. The index is a weighted average of 85 different economic indicators, designed so that a reading of zero is equivalent to trend growth. When the three-month average exceeds 0.7, there’s an increasing likelihood of sustained increasing inflation, and when it’s below negative 0.7, there’s an increasing likelihood a recession has begun.

U.S. manufacturing picked up in May, according to the purchasing managers index released by Markit on Thursday.  The manufacturing PMI rose to 56.2 compared to the 55.4 in April. Readings over 50 indicate growth.  Readings for new orders, new export orders and employment expanded at a slower pace than April. Basically this means that manufacturing is at an even pace barely exceeding growth numbers.

On the Real Estate front: Sales of existing homes rose 1.3% in April to an annual rate of 4.65 million, the National Association of Realtors reported.  Details of the report contained at least two nuggets that may bode well for future sales. One, the number of existing homes on the market is rising, a trend that will give buyers more choice and support sales. Inventories jumped almost 17% in April. Two, home-price growth is slowing, which may make would-be buyers more comfortable with entering the market.  The median sales prices for existing homes hit $201,700 in April, up 5.2% from a year earlier supported by low inventory.  Last year, price growth was in the double digits.  This is the first crucial sign that the housing recovery, which had essentially stalled during the past nine months, may be on the verge of a rebound.

On the Employment front:  New applications for unemployment benefits rose in mid-May, reversing a big drop earlier in the month that put initial claims at a seven-year low.  The number of people who applied for new benefits climbed by 28,000 to 326,000 in the week ended May 17.  I guess they just waited a week.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

The Weekly Rap! Friday May 16th, 2014

The National Debt is currently: $17,521,071,962,587.00 is lower by about 27 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,437 right about where it was a week ago.  The S&P 500 is trading at 1,870.  Gold is trading at $1,293 an ounce, while oil futures at $102.09 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 105.35 about .20 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.   

In economic news this week; The reader’s digest version is the economy is showing signs of improvement, not great but improvement.  Inflation is on the rise, retail sale is slightly higher, small business sentiment is higher while consumer sentiment is lower, manufacturing activity appears to be growing at a moderate pace, home building has slowed and employment is improving.

The government recorded a budget surplus of $107 billion in April.  The surplus for April is $6 billion, or 5%, lower than in April 2013. April is usually a surplus month, as Treasury sees a spate of tax payments from individuals and corporations.  Though smaller than last year’s, the April surplus contributes to a steady decline in the deficit for fiscal 2014.  For the first seven months of the fiscal year that began Oct. 1, the deficit is $306 billion. That is $181 billion, or 37%, lower than it was for the same period in fiscal 2013.  In April, the government spent $307 billion and took in $414 billion.

Wholesale prices climbed 0.6% in April, marking the second straight big gain in a government index that underwent a major overhaul at the start of the year.  Excluding the volatile categories of food, energy and trade, core wholesale prices rose a smaller 0.3% last month, the Labor Department reported.  Personal consumption, a new index designed to foreshadow changes in the consumer price index, rose 0.7% in April. Over the past year overall producer prices have risen 2.1%, up from 1.4% in March and just 0.9% in February. The unusually sharp increase in such a short period raises questions about the usefulness of the fresh-look PPI index, at least in the short term.

Consumer prices posted the biggest increase in April since last summer as the cost of many staples rose, making it harder for Americans to stretch their paychecks to pay for typical household expenses.  The consumer price index jumped 0.3% last month to mark the largest gain since June, the Labor Department said.  As a result, real inflation-adjusted hourly wages decreased 0.3% in April to mark the biggest decline in 14 months. Over the past 12 months real hourly wages have actually fallen 0.1%, the first negative reading in two and a half years.  The yearly pace of inflation rose to 2% in April from 1.5% in the March.

Excluding the volatile food and energy categories, core consumer prices increased 0.2%.  The core rate has risen 1.8% in the past 12 months, and it’s been stuck between 1.6% and 1.8% for more than a year. The core rate is viewed as a more useful gauge of underlying inflationary trends, but it remains well below the level the Federal Reserve considers harmful to the economy.

Americans apparently shopped less in April after splurging in March, with retail sales rising a scant 0.1%.  The increase in March was originally reported as 1.1%. Excluding the auto sector, retail sales were unchanged.  So-called core or control group sales fell 0.2%.  That category strips out cars, gasoline and building materials and gives a better sense of retail-sales trends.  Retail sales account for about one-third of consumer spending, the main conduit of economic activity.  In the past 12 months, retail sales have risen 4%, about two-thirds the historic average.  The latest retail report includes the government’s annual benchmark revisions meant to provide more accurate data.

Small-business sentiment in May rose to the highest level in more than six years, the National Federation of Independent Business said Tuesday. Its small-business optimism index rose 1.8 points to 95.2, the first time it’s surpassed the 95 level since Oct. 2007. There were gains in seven of the 10 components, notably a 9-point jump in those who expect the economy to improve.

The preliminary May reading of the University of Michigan and Thomson Reuters consumer sentiment index fell to a reading of 81.8, down from 84.1 in April.

Manufacturing activity appears to be growing at a moderate pace in the second quarter, according to three separate readings released Thursday.  The most upbeat indicator was a survey of manufacturers in the New York, which hinting that business owners were less melancholy about the outlook.  After barely expanding in April, the Empire state index shot up to 19.0 in May, its highest level since mid-2010, according to a report released by the New York Federal Reserve Bank.

Two other indicators were not as rosy but economists argued that they also hinted at future strength in the sector.  The Philadelphia Fed’s manufacturing index retreated slightly to a reading of 15.4 in May from a 16.6 reading in April. The drop in the Philly Fed index retraces only a small part of the sharp gain in April. The index was 9.0 in March.

The Empire State and Philly Fed data are closely watched because they are one of the first readings of the health of the manufacturing sector in May.  The softest report was the industrial output data for April released by the Federal Reserve , that showed a 0.6% drop in April. But that came after strong gains in February and March.

Home builder index Apr 2014CPI Apr-2014

On the Real Estate front:  Home builders are the most pessimistic they’ve been in a year, with makers of new single-family homes reporting fewer sales.  The housing-market index for builder confidence declined to 45 this month, the lowest reading since May 2013, from 46 in April, the National Association of Home Builders/Wells Fargo reported.  The index has been below 50 since February, indicating that builders, generally, are pessimistic about sales trends.  

While the Overall construction starts on U.S. homes, including apartments rose 13.2%, the fastest pace in five months, according to the U.S. Commerce Department, that jump was led by apartments, as starts for single-family homes only nudged higher.  Starts for single-family homes eked out just a 1% gain in April.  Data for building permits, which are an indicator of future projects, also indicated that demand for apartments, not single-family homes, is driving growth.

Just last week, Federal Reserve Chairwoman Janet Yellen expressed caution about the housing market. “Readings on housing activity, a sector that has been recovering since 2011, have remained disappointing so far this year and will bear watching,” she told U.S. lawmakers. “The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery.” “The U.S. economy has come far since the deths of the financial crisis but “we have further to go to achieve a healthy economy,”

The good news is that some headwinds for the housing market are abating. Mortgages rates, for example, have declined in recent weeks.  Home-price growth is slowing down. And employers are picking up the pace of hiring.

On the Employment front:  The number of Americans who applied for unemployment benefits declined by 24,000 falling sharply for the second straight week, touching the lowest level since May 2007, but at least part of the drop probably stemmed from lingering seasonal affects tied to a late Easter holiday.  It looks as though Small business is leading the way in hiring as a little more than half of the net number of jobs created since employment began growing in 2010 has been generated by firms with fewer than 250 employees.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage Advisor  MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday April 25th, 2014

The National Debt is currently: $17,548,071,962,587.00 is lower by about 34 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,381 right about where it was last Friday. The S&P 500 is trading at 1,866. Gold is trading at $1,300 an ounce, while oil futures at $100.86 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.88/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.5 about .60 better than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along but at least moving in a positive direction. We continue to see small snippets of growth that are often spun into looking like larger growth numbers, but ultimately we are no further than we were a few years ago.

The Chicago Fed National Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, decreased to 0.20 in March from 0.53 in February. In attempting to try to illustrate the positive; the index’s three-month moving average rose to a neutral reading in March from negative 0.14 in February. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. A positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend. As you can see we are pretty much at dead even.

The Conference Board’s leading economic index rose 0.8% in March, after a 0.5% rise in February. “This is an optimistic report, but the focus will continue to be on whether improvements in the labor market can be sustained, fueling stronger economic performance over the next few months,” said Ken Goldstein, economist at The Conference Board. Now I love a good economist report as much as the next person but this is why I call them “Economites.” The index rose a tad over ½ of one percent, and he calls it “an optimistic report.” Really??? It’s all in how you spin it folks.

Orders for durable goods such as computers, aircraft and heavy machinery rose by 2.6% in March and while the rise seems small, it was the biggest gain in four months, offering according to the Economites, another sign that the economy might be on the upswing after a winter-induced lull. The increase in bookings for big-ticket items last month was the largest since November, and orders for computers and electronic products, for example, rose by 5.7% to mark the sharpest spike in almost 3 1/2 years, the Commerce Department reported. Small gains can seem large when the overall growth in relatively small as well.

Consumers are the perkiest they’ve been in nine months, according to the University of Michigan and Thomson Reuters’s gauge of consumer sentiment holding brighter views on current and coming economic conditions, hitting a final April reading of 84.1, the highest reading since July, up from a final March level of 80. We watch sentiment levels to get a feeling for the direction of consumer spending. According to UMich’s report, households with top incomes reported improved buying attitudes this month, while lower-income homes reported a slight decline. Next week the government will release its monthly report on consumer spending, and the expectation is for a pickup for March.

Also according to the report, home purchasing is becoming more responsive to mortgage-credit availability stating: “The main attraction of home-buying conditions has shifted in the past few months toward a greater reliance on low mortgage rates and less emphasis on low prices.” Home prices have raced higher over the past year. And while mortgage rates have increased, too, they remain relatively low. Home builders are starting to respond to consumers who are unable or unwilling to pay for a pricey new place.

Consumer sentiment Apr 25, 2014 Cash-out Refinancings Apr 2014 Existing Home Sales Mar 2014

On the Real Estate front: The National Association of Realtors sales reported the pace of existing homes dropped 0.2% in March to the slowest rate since July 2012, showing weakness in the early spring sales season, though underlying trends signal a firming in market fundamentals. Sales rates have trended down since the summer on falling affordability as inventory remained low, and there’s been concern about tepid spring-sales results. Some buyers have been put off by rapidly rising prices. According to NAR, the median sales price of used homes hit $198,500 in March, up 7.9% from the year-earlier period. First-time buyers’ share of existing-home sales rose to 30% last month, up from 28% in February. The long-term average is closer to 40%. Distressed properties’ share of existing-home sales fell to 14% in March from 16% in February.

According to the Federal Housing Finance Agency (FHFA), data based on mortgages sold or guaranteed by Fannie Mae and Freddie Mac, home prices rose 0.6% in February, and were up 6.9% from the year-ago period.

On the Employment front: The number of Americans who applied for unemployment benefits last week rose by 24,000 in April to the highest level since the end of March, but most of the bump may have been related to a seasonal quirk tied to the Easter holiday. Claims often rise around Easter because the holiday falls on different dates each year and that makes it harder for the government to conduct seasonal adjustments. Continuing claims decreased by 61,000 to a seasonally adjusted 2.68 million in the week ended April 10. That’s the lowest level since December 2007, when the Great Recession started. Continuing claims reflect the number of people already receiving benefits.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

The Weekly Rap! Friday April 18th, 2014

The National Debt is currently: $17,582,052,685,587.00 is higher by about 12 BILLION. I post this so we will be aware of what we are leaving the next generation.

Markets are closed today due to Good Friday. I hope you have a great weekend and a Happy Easter however you choose to celebrate it. Eggs from a rabbit anyone???

The Dow last traded at 16,408 about 380 pts. higher than where it was last Friday. The S&P 500 is trading at 1,864. Gold is trading at $1,294 an ounce, while oil futures at $104.59 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.80/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 103.95 about .75 worse than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy is limping along but at least moving in a positive direction. The new Fed Chairwoman is calling current growth “modest to moderate.” Retail sales and inflation rose but very slightly. Manufacturing sees to be picking up a bit, and new home construction is on the rise.

Retail sales rose 1.1% in March, indicating that the economy is moving in a positive direction after the cold winter. The report, which shows the largest gain for sales since September 2012, adds to the perception that the economy has taken a turn for the better. But it will take several months to know for sure whether this strong spending can be sustained. Excluding a 3.1% rise in auto sales, retail sales rose 0.7%, the fastest pace since February of last year. Excluding the 1.3% drop in gasoline-station sales, retail sales rose 1.4%, the biggest rise since March 2010. Excluding both autos and gas, sales rose 1%, still the fastest pace since February 2012.

Consumer prices rose slightly 0.2% in March after a 0.1% gain in February, pushed up by higher costs for shelter and food. Excluding volatile food and energy prices, so-called core prices ticked up 0.2%. On a three- and six-month basis, prices are creeping higher, which is something to keep an eye on, but with wage growth still modest and lots of retail competition, inflation should remain in check for now.

Industrial production grew 0.7%, in March, and February’s data was revised higher to show the biggest monthly advance since May 2010, according to data released by the Fed. The gains mean that production grew an annualized 4.4% in the first quarter. Capacity utilization rose in March to 79.2% from an upwardly revised 78.8% in February.

A reading of manufacturing sentiment in the Philadelphia region improved in April, contradicting a disappointing regional index from the New York Fed released earlier in the week. The Philadelphia Fed’s manufacturing index rose to a reading of 16.6 in April from 9.0 in March, much stronger than a forecast of 10.0. It is the strongest reading since last September. Any reading above zero indicated expansion. The index has improved markedly from a negative 6.3 reading in February that was blamed on severe winter weather. The components of the report were mostly positive.

The Empire State manufacturing index, the first of the many regional manufacturing gauges to be released, slipped to 1.3 in April from 5.6 in March, the New York Fed reported. Any reading above zero indicates improving conditions.

Economic activity increased in most of the country as the weather improved, particularly in the snow-ravaged northeast, according to summary of economic conditions published by the Fed. The Beige Book, a collection of reports about the economy, said 10 of its 12 districts saw improvement, mostly of the “modest to moderate” variety. This summary fits with the view of most private-sector economites that activity has rebounded as weather has returned to normal.

Our newest Fed Chairwoman Janet Yellen stated that a strong economy with full employment and stable prices is “tantalizingly” on the horizon. In a speech to the Economic Club of New York, Yellen noted that the central bankers and many economites see a return to full employment and stable prices by the end of 2016. This would be the strongest economy in a decade. “I find this baseline outlook quite plausible,” Yellen said. Read full text of her address. She quickly added that the forecast is still two years away, showing “how far we have to go.” She also stated, “The recovery still feels like a recession to many Americans.” Why? Long-term, joblessness remains high, and quitting is still below pre-recession levels, signaling that many workers are unwilling to trade some job stability and security to advance their careers.

The overall tone of Yellen’s first major public remarks since assuming the helm of the FOMC was broadly in line with recent Fed rhetoric. Yellen is considered to be “dovish” on the monetary policy stance (meaning; promoting monetary policies that involve the maintenance of low interest rates, believing that inflation will have a minimal impact on society. It’s derived from the docile and placid nature of the bird of the same name, and is the opposite of the term “hawk”), but she’s upbeat on the economic growth and inflation outlook. The main message continues to be that the Fed remains committed to providing a helping hand to the economic recovery, while becoming more confident in the ability of the recovery to finally achieve liftoff later this year. See Rant on my blog a little later regarding the Fed and their “stimulus” policies.

MW-CA053_Claims_20140417092545_MGHome-construction pace risesConsumer prices ticked up slightly in March

On the Real Estate front: Construction on new homes in March hit the fastest pace in three months (which still isn’t much), led by single-family homes. Home-construction starts rose 2.8% as they rebounded from a tough winter. Despite March’s gain, the starts rate was down 5.9% from the year-earlier period, the widest annual contraction since April 2011.

Echoing the construction of new homes, a report earlier this week showed confidence among builders in the market for newly built, single-family homes edged up slightly this month to a reading of 47 from 46 in March, according to the National Association of Home Builders/Wells Fargo housing market index. The index has now held below 50 for three straight months. Any number over 50 indicates that more builders view conditions as good than poor. The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32, the NAHB said. The component measuring expectations for future sales rose four points to 57.

On the Employment front: The number of people applying for unemployment-insurance benefits is sticking close to the lowest level since 2007, signaling that employers are maintaining a slow pace of layoffs. The Labor Department reported that initial claims for unemployment-insurance benefits reached 304,000 last week. That tally is up 2,000 from 302,000 in the prior week, which was the lowest level since September 2007.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

The Weekly Rap! Friday April 11th, 2014

  I just got my own personal mobile phone App for your smart phone! This will replace my business card as you will always have it with you. You can download it on your mobile phone. It gives you all my contact info with links to my social media sites including: my blog and this Weekly Rap, mortgage and real estate news, a very useful mortgage calculator and more. You can share it with others simply by hitting “share” in the App and texting it to their cell phone. CLICK HERE FROM YOUR SMART PHONE TO ADD: http://bbartok.mortgagemapp.com/mobile

The National Debt is currently: $17,574,181,702,957.00 is higher by about 28 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,089 about 400 pts. lower than where it was last Friday. The S&P 500 is trading at 1,826. Gold is trading at $1,318 an ounce, while oil futures at $104.17 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.75/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.65 about .50 belter than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is consumer credit is rising, small business optimism is on the rise, the Federal budget (although not balanced and bleeding cash) is getting smaller, our local real estate market is heating up, and employment looks to be improving.

Consumer Credit climbed 6.4% or $16.5 billion in February, mainly due to college loans and auto purchases as reported by the Fed Gods. Consumer credit rose 5.3% in January, 7.0% in December and 5.5% in November. Consumer debt has risen every month since August 2011. Non-revolving credit such as federal student loans jumped 10.1%, or $18.9 billion, in February. Credit-card debt fell by 3.4%, or $2.4 billion. That’s the second straight decline in credit-card debt. Credit card debt has barely risen since 2010, but non-revolving loans have jumped nearly 26% since then.

A measure of small-business optimism improved in March but still didn’t surpass January levels. The National Federation of Independent Business said its small-business “optimism” index rose 2 points to 93.4, helped in particular by those who expect real sales to be higher. The best component, at positive 24%, is “plans to make capital outlays,” and the worst component, at negative 24%, is “earnings trends.”

The Fed Gods apparently had a secret video conference call in early March and reached a general consensus that the 6.5% unemployment rate threshold for the first rate hike was outdated. A summary of the video conference was included in the minutes of the Fed’s March 18-19 meeting released by the Fed. The Gods were clearly worried that changing the forward guidance would impact markets. They noted that, going into the video conference, the Fed and the markets were on the same page about the outlook for short-term interest rates.

After the meeting, the Fed policy committee statement took out any reference to an unemployment rate of 6.5% as a possible threshold to consider raising short term rates. Instead, the Fed said it will “take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments” before deciding to raise short-term rates.

The U.S. budget deficit narrowed sharply in March, the Treasury Department reported, as tax receipts climbed and government spending fell broadly. The government’s shortfall was $37 billion, down 65% compared to the March 2013 deficit of $107 billion. The government’s deficit has been steadily improving. With the March figures, the shortfall for the first six months of the 2014 fiscal year is $413 billion. The year-to-date deficit is down 31% from the same period a year ago.

U.S. producer prices, or inflation at the wholesale level, rose 0.5% in March at the fastest rate in nine months, owing largely to higher costs experienced by clothing retailers, grocers and wholesalers of chemical goods. That’s the largest increase since last June and surpassed the 0.1% estimates. The wholesale cost of services surged 0.7%, the biggest spike in more than three years, to push the index higher. Excluding the volatile categories of food and energy, so-called core producer prices jumped 0.6% last month. The spike in prices pushed the year-over-year increase in wholesale costs to 1.4% from just 0.9% in February. That’s the highest rate since last August.

PPI 4-11-14 Fed Budget 4-11-14 Consumer sentiment highest in nine months

A gauge of consumer sentiment is the highest in nine months, with sunnier views on both current and upcoming economic conditions, according to data released this morning. Markets watch sentiment levels to get a feeling for the direction of consumer spending. The overall consumer-sentiment gauge from the University of Michigan and Thomson Reuters rose to a preliminary reading of 82.6 in April, the highest since July, from a final March level of 80. For context, the gauge average is 86.9 over the year leading up to the start of the recession.

On the Real Estate front: Local data (El Dorado Hills to Placerville) is out for the month ending March 14th. New Listings are up 39% from February, up 206% from December, and 10% from 1 year ago. Homes currently for sale are up 7% from February, up 10% from December, and 36% from 1 year ago. Pending Sales are up 54% from February, up 100% from December, and 1.8% from 1 year ago. The Average price per square ft. is up 4.4% from February, up 5.8% from December, and 17% from 1 year ago. The average “days-on-market” is currently 67 from 74 in February. The average “months-of-inventory” is down to 3.4 from 4.5 last month. The median sold price was higher by almost 15% from February and almost 20% higher than last year at this time. What does this mean for our real estate market you ask? Well, prices are on the rise, more homes are being listed/sold, and more buyers are entering into contract. Our market is heating up!

On the Employment front: Job openings at U.S. workplaces rose to 4.17 million in February, the most in just over six years, from 3.87 million in January. Compared with same period in the prior year, February job openings rose 4%, as private-sector openings increased 5% to 3.78 million, and government positions declined. With 10.46 million unemployed people in February, there were about 2.5 potential job seekers per opening, below January’s ratio of 2.6. In February 2013, there were 12.05 million unemployed people, about 3 potential seekers per opening. When the recession began in December 2007, there were less than two potential job seekers per opening.

Once older workers lose a job, they face steep obstacles in getting rehired, and equally difficult financial challenges in managing a bout of long-term unemployment, including the prospect of never working again. On average, workers age 55 and up were unemployed for 45.6 weeks, compared with 34.7 weeks for workers younger than 55, according to AARP’s analysis of Bureau of Labor Statistics data from February.

The number of people who applied for U.S. unemployment benefits last week fell to a nearly seven-year low of 300,000, a sign the labor market might be experiencing a spring revival. Initial claims ended April 5 sank by 32,000 from a revised 332,000 in the prior week. The last time claims were that low was in May 2007, six months before the Great Recession began.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

The Weekly Rap! Friday April 4th, 2014

The National Debt is currently: $17,565,412,702,957.00 is higher by about 20 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,501 about 250 pts. higher than where it was last Friday. The S&P 500 is trading at 1,872. Gold is trading at $1,303 an ounce, while oil futures at $101.38 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.75/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.15 about .15 better than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along at a snail’s pace with The employment report being the big news of the week. The U.S. created 192,000 jobs in March, and the unemployment rate was unchanged at 6.7%.

Purchasing Managers’ Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies. The two principal producers of PMIs are Markit Group, which conducts PMIs for over 30 countries worldwide, and the Institute for Supply Management (ISM), which conducts PMIs for the US. The surveys are done monthly by polling businesses that represent the makeup of the respective sector. The surveys cover private sector companies, but not the public sector. We watch these for an indication of future economic outlook. Results over 50 indicate an expansion from the prior month.

The Chicago purchasing-managers index fell to 55.9 in March hitting the lowest level since August, down 3.9 points from February led by drops for new orders and employment. The Chicago-PMI survey registers manufacturing and non-manufacturing activity in the Chicago region. Investors care about this indicator because the Chicago region somewhat mirrors the nation in its distribution of manufacturing and non-manufacturing activity.

The final Markit PMI for the U.S. in March was unchanged at 55.5, down from 57.1 in February. The slight drop-off in the March PMI comes after the Markit index rose in February to the highest level in almost four years, helped by manufacturers catching up after winter-related softness in January.

The Institute for Supply Management said its manufacturing index rose to 53.7% from 53.2% in February. The employment gauge dropped 1.2 points to 51.1%, but the ISM’s new-orders index edged up to 55.1% from 54.5%, and production surged to 55.9% from 48.2%, marking the best performance in 2014. Fourteen of the industries tracked by ISM reported growth last month while four recorded a decline.

The U.S. Commerce Department reported that orders for goods produced in U.S. factories rose 1.6 % in February. Factory orders fell by a revised 1% in January, compared with a prior estimate of a 0.7% decline. Orders for durable goods (products meant to last at least three years) rose 2.2% in February. Orders for nondurable goods increased 1%.

On the Real Estate front: There was no real estate related news released this week.

On the Employment front: The U.S. created 192,000 jobs in March, and the unemployment rate was unchanged at 6.7%, the result of more than a half-million people joining the labor force in search of work, according to Labor Department figures . The expectation was for an increase of 200,000 nonfarm jobs. In March, hiring was strongest in the professional ranks and at bars and restaurants. Manufacturing shed 1,000 jobs but was the only sector to do so.

Average hourly wages, meanwhile, dipped just 1 cent to $24.30 after several strong gains. And the average workweek jumped 0.2 hours to 34.5 hours, matching a post-recession high. The labor-force participation rate moved up to 63.2% from 63%, as 503,000 people searched for work, a sign that they think more jobs are available. Employment gains for February and January were revised higher by a combined 37,000. The number of new jobs created in February was raised to 197,000 from 175,000, while January’s figure was increased to 144,000 from 129,000.

The gain in employment might not be large enough to assure that job creation and broader economic growth are ready to reignite after a first-quarter slowdown. The main takeaway from this report is that employment growth and upward revisions along with a rebound in the workweek are good news, not great news, but good news. The flat growth in hourly earnings and the lack of a drop in the unemployment rate reminds us that the Fed has plenty of breathing room, for now.

Unemployed rate still elevated Hiring remains depressed

You can visit my corporate website at: http://bill.bartok.stanfordloans.com

Sincerely,

 

Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

The Weekly Rap! Friday March 28th, 2014

The National Debt is currently: $17,546,412,702,957.00 is higher by about 20 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,285 about 50 pts. lower than where it was last Friday. The S&P 500 is trading at 1,853. Gold is trading at $1,294 an ounce, while oil futures at $101.77 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.70/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.00 about .375 worse than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along at a snails pace with Most of the upward movement due to higher healthcare costs as consumers now have to pay their own health insurance due to the new “Affordable” health care law known as Obama Care..

The economy’s growth in the final three months of 2013 was bumped up to a 2.6% annual pace from 2.4%, but the increase stemmed mainly from higher spending on health care and little else. The solid pace of growth in the waning months of 2013, following a 4.1% advance in the third quarter, showed an economy that entered the new year with fresh momentum but still not fully healed more than four years after the end of the Great Recession. And some of that momentum was lost in the first quarter owing to a brutally harsh winter that disrupted business operations across large stretches of the U.S. and kept consumers indoors.

Higher health-care expenditures accounted for nearly three-fourths of the revised increase in consumer spending in the last three months of 2013. Bigger electricity bills also contributed. While most expect growth to accelerate later this year, the first quarter is shaping up to disappoint. The expectation is for gross domestic product to taper off to 1.6%. GDP reflects the total value of all goods and services produced by the economy. The U.S. has expanded at an average pace of 3.3% since 1929, but growth has slowed to a 2.3% rate in the first four full years since the Great Recession ended. Oh by the way, the stock market has more than doubled in value in the last 4 years.

The national activity index, a gauge of economic activity, swung back to positive territory in February. The index rose to 0.14 from negative 0.45 in January, while the three-month moving average fell to negative 0.18 from positive 0.02. The index is a weighted average of 85 different economic indicators, designed so that readings of zero indicate trend growth. When the three-month average value moves below -0.70 following a period of economic expansion, there is an increasing likelihood that a recession has begun.

The purchasing managers index or, PMI, for the U.S. fell to 55.5 in March from 57.1 in February, but still showed improving conditions for manufacturers. Readings over 50 indicate growth. In March, output was barely changed at 57.5. New orders dipped to 58.0 from 59.6 and employment fell to 53.9 from 54.1. The slight drop-off in the March PMI comes after the index rose in February to the highest level in almost four years, helped by manufacturers catching up after winter-related softness in January.

A gauge of consumer confidence rose to 82.3 in March from an upwardly revised 78.3 in February, the Conference Board reported. The expectations index rose to 83.5 in March from 76.5 in February, while a barometer for the present situation declined to 80.4 from 81. Apparently while consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth. The expectation is that the economy will continue improving and believe it may even pick up a little steam in the months ahead.

According to a report from the University of Michigan and Thomson Reuters, consumer sentiment declined to a final March reading of 80, the lowest level since November, from a final February level of 81.6. Sentiment levels are watched to get a feeling for the direction of consumer spending.

Consumer spending rose 0.3% in February at the fastest rate since November as Americans spent more on health care and utilities, but purchases of durable goods fell for the third straight month in a negative sign. Partly offsetting the gain, however, was a reduction in rate of spending in January. Spending increased at a 0.2% clip in the first month of the year instead of 0.4% as previously reported. Personal income also rose 0.3% in February.

The savings rate edged up to a four-month high of 4.3% from 4.2% in January. Inflation-adjusted disposable income, meanwhile, jumped 0.3% to mark the biggest advance in five months. Also, inflation as gauged by the core PCE price index posted a slight 0.1% increase in February, and it’s up just 1.1% over the past 12 months. The overall PCE index also rose 0.1% last month and its climbed 0.9% in the past year, offering further evidence that inflation remains muted.

On the Real Estate front: Home prices ticked down 0.1% in January for a third straight month after a particularly harsh winter, according to S&P/Case-Shiller’s 20-city composite index, as strong year-over-year appreciation showed signs of moderating. Including January, prices remained about 20% below a 2006 peak. Price gains over the past year should encourage more sellers to place their homes on the market, thereby raising inventory and cutting upward pressure on prices.

There’s concern about recent weakness in housing-market data. Unusually poor weather may have also a played a role in the drop in home sales, but it’s unclear how much of recent weakness is due to a particularly harsh winter or limping demand. If the weakness is weather related, housing projects and purchases that were delayed could show up in coming months.

New homes sales were down 3.3% from January’s one-year high, the government said Tuesday. New home sales are 1.1% lower compared to one year ago, reflecting weaker demand because of higher mortgage rates and home prices as well as a bitterly cold winter.

Slumping for an eighth month, a gauge of pending home sales fell 0.8% in February to the lowest level in more than two years, signaling that upcoming activity may slow, the National Association of Realtors reported. The index of pending home sales hit 93.9 in February – the lowest reading since October 2011 compared with 94.7 in January. Low inventory, declining affordability and poor weather have hit the housing market in recent months. Pending sales typically close within two months. An index reading of 100 equals 2001′s average contract activity level.

On the Employment front: Applications for unemployment benefits fell last week to the lowest level in four months, indicating that layoffs have slowed and perhaps a hint that hiring is about to pick up. Initial jobless claims are a gauge of whether layoffs are rising or falling and changes in the number of people seeking benefits tend to correlate over time with how many jobs the economy is producing.

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