week’s economic news offered a variety of indications that the economic
recovery continues, but some readings missed their expected levels. The
Philadelphia and New York branches of the Federal Reserve Bank reported
higher than anticipated manufacturing for their respective regions and
new jobless claims were lower than expected.
Fed Chair’s Senate Testimony Hints at Coming Interest Rate Hike
Federal Reserve Chair Janet Yellen testified that the Fed might have
to raise interest rates sooner than expected if the economy continues to
outperform the Fed’s projections. Ms. Yellen said that the central bank
presently estimates that the first rate increases will take place
approximately one year from now.
The Federal Open Market Committee (FOMC) of the Fed has repeatedly
stated that members will continue to review data and economic conditions
changing monetary policy. Ms. Yellen said in last week’s remarks that
this holds true whether economic conditions improve or decline.
In other Fed-related news, the Philadelphia Fed released its
manufacturing index for July with higher than expected results. The
Philly Fed’s reading for July was 23.90 as compared to expectations of
16.50 and June’s reading of 17.80.
The New York Fed reported a similar trend for July with a reading of
25.60 as compared to an estimated reading of 17.50 and June’s reading of
19.30. This is good news after the Northeast’s economy was slammed by
severe weather last winter. Weather conditions stalled area housing and
Weekly jobless claims were lower at 303,000 than expectations of
310,000 new jobless claims and the prior week’s reading of 305,000 new
Home Builders Post Positive Confidence Reading for July
The National Association of Home Builders posted its highest builder
confidence reading in six months for July with a reading of 53 against
the expected reading of 50 and June’s reading of 49. Numbers above 50
indicate that more builders surveyed have a positive outlook than not.
Housing Starts for June were reported lower than expected at an
annual level of 893,000 against an expected reading of 1.02 million and
May’s reading of 985,000 housing starts.
Mortgage Rates Lower....Read More