August 2008 - MND NewsWire

There were few surprises in the Personal Consumption and Expenditure (PCE) report released Friday, though economists say the data all points to weaker third-quarter results.

The personal consumption expenditures (PCE) core deflator, the Federal Reserve's preferred measure of inflation, came in line with expectations, advancing by 0.3% (0.273%) in July, and 2.4% (2.426%) on an annual basis, the U.S. Department of Commerce reported.

The strong upward revision to second quarter U.S. GDP was the result of strong exports and the fiscal stimulus package, according to economists who are already looking forward to GDP results from the third quarter.

Sheila C. Bair, chairman of the FDIC said, "By any yardstick, it was another rough quarter for bank earnings, but the results were not unexpected as the industry coped with financial market disruptions, the housing slump, worsening economic conditions, and the overall downturn in the credit cycle."

Higher provisions for loan losses were cited as the primary reason for the drop in industry profit. These provisions totaled...

Atlanta Fed President Dennis Lockhart welcomed the recent rise in the U.S. dollar, but said home prices in the U.S. could fall another 10-15%.

Following a speech at an Economic Outlook Conference in Atlanta Wednesday, Lockhart said "housing prices will continue to decline," perhaps by as much as 15%.

Weekly mortgage applications in the United States increased in the week ending Aug. 22, according to data released from the Mortgage Bankers Association (MBA) on Wednesday, which reported a 0.5% week-over-week rise in applications.

In the previous week, applications also fell by 1.5%.

New home sales in the U.S. rebounded by 2.4% to an annual pace of 515k in July, the Commerce Department reported Tuesday. Despite the percentage gain, that pace of sales is much lower than expected following 46k of downward revisions to the previous data.

The Conference Board's U.S. consumer confidence index for August improved to 56.9 in Tuesday's report, higher than the expected improvement to 53.0.

"Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year...

The S&P Case-Shiller U.S. home price index fell less than expected in the second-quarter as the 20-city composite index posted an annual decline of 15.38%, up from a 14.22% decline in the first quarter.

The Case-Shiller index has fallen every month since peaking in July 2006, but economists say the rate of decline may be slowing, as evidenced by the three-month annualized rates.