In the News (January 20, 2009)

On Monday, The Mortgage Bankers Association reported its seasonally adjusted index of mortgage applications, for both purchase and refinance loans, on the week ending January 9, increased 15.8% to 1,324.8. That's the highest reading since the week ending July 11, 2003, when it reached 1,358.2. The refinance index increased 25.6% to 7414.1, the highest reading since the week ending June 27, 2003, when it reached 8,599.1.

The Commerce Department reported that retail sales dropped 2.7% in December compared to a revised 2.1% decrease in November. Economists had anticipated a 1.2% drop in December. The decline was the sixth straight monthly drop. For the year, retail sales fell 0.1%. It was the first time the annual retail sales figure has fallen on government records going back to 1992. Retail sales increased 4.1% in 2007.

The Commerce Department also reported that total business inventory decreased 0.7% in November. It was the largest decline in seven years and the third straight month companies sought to cut their inventory.

On Thursday, the Labor Department said new applications for unemployment insurance rose last week to a seasonally adjusted 524,000 from a revised figure of 470,000 the previous week. Economists had anticipated a reading of 500,000.

The Labor Department reported the producer price index, which tracks wholesale prices, fell 1.9% in December. That followed a drop of 2.2% in November and a record 2.8% drop in October. The decreases were largely attributed to falling energy costs. In December, energy prices dropped 9.3%, led by a record 25.7% decrease in the cost of gasoline. The government said wholesale prices fell by 0.9% in 2008 compared to a 6.2% increase in 2007.

Upcoming on the economic calendar are reports on the housing market index on January 21 and housing starts on January 22.