RATES IMPROVE ON MIXED ECONOMIC DATA
STRAIGHT STATS
Mortgage interest rates improved this past week as economic data was mixed. Economic reports better than expected included March Retail Sales, which were up 1.6% on expectations that they would be up 1.1%. Excluding automobile and truck sales, retail sales were up 0.6% on expectations that they would be up 0.5%. February Business Inventories and March Housing Permits were also stronger than expected. Housing permits increased 7.5% to their highest level since October of 2008. Economic reports weaker than expected included March Industrial Production, weekly jobless claims, March Housing Starts, and the University of Michigan Consumer Sentiment Index. Also of note, the March Consumer Price Index (CPI) increased only 0.1%. Excluding the food and energy components, core CPI was unchanged. Both data points reflect tame inflation.
COMMENTARY
Mortgage and long-term Treasury rates are falling suddenly today, as the SEC’s fraud charge against Goldman Sachs is tanking the stock market.
Couldn’t happen to a nicer bunch of people. The 10-year T-note has broken below recent 3.80% resistance to 3.77%, mortgages headed toward 5.00%.
Interpreting new economic data is trickier than ever, even for professionals, as an odd confluence has tipped public sources into uniform economic cheerleading. The whole country would like not to hear another word about recession, and is hungry for news of recovery. Media tend to supply whatever it takes to sell soap.
CNBC years ago dispensed with real news. Bloomberg television was a reliable replacement, but this winter cloned CNBC’s grinning kids in happy talk (its web-based news is still as straight as anything available). The WSJ under Murdock is dumbing-down to the USAToday of business. It does have the old, reliable hostility to real estate and government, but its stock-boosting leads to a parade of “strong-recovery” stories. The New York Times has been the counterweight, but now it has a President that it likes, and pushes administration success and recovery.
Meanwhile, the economy is in a cycle never seen before, parts in actual recovery, parts not, and which one is predominant and trend-setting should preface every story.
