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Tim Lundgren

Kevin Doyle

Realtor

Mortgage Advisor

Edina Realty 651-287-4046

The Doyle Group @ Mortgages Unlimited 612-701-4888

Monday Economic Newsletter June 27, 2011 HOW BAD IS THE ECONOMY, REALLY? Last week’s meeting of the Fed produced a statement that stated concern about an under-performing economy. The bond buying program, ‘QE2’ will end June 30. The purpose of QE2 was to keep rates low and stimulate the economy. Rates have stayed low but without jobs and people earning money will the economy really improve? Weekly Jobless Claims came in higher than expected and it has been 10 weeks with the number over 400,000, which is a bad benchmark. The good news of the week was New and Existing Homes Sales higher than expected and Orders for Durable Goods a little higher than expected. This week will have many releases in addition to the Federal and State Budget Battle’s! The high impact releases will be today with the Personal Consumption Expenditures, Thursday’s Chicago Purchase Managers Inventory and Friday’s Institute of Supply Managers Index. All are expected to be less or worse than last months. Also today the Personal Income and Spending is always considered when looking at the future of the economy. Thursday’s Jobless Claims are expected to remain over 400,000 and continue to show a challenged employment outlook. The week ends with Consumer Sentiment as measured by the University of Michigan. It starts the 4 day holiday weekend so we all might be a little happier.

LOOKING FORWARD TO FIREWORKS!

“Everything gets easier when you get better. “ Todd Duncan

A few quote’s from people that are in the know! “Right now, unfortunately, there is probably more bad news than good news,” Kurt Darrow, chief executive officer of Monroe, Michigan-based La-Z-Boy, said on a conference call with analysts yesterday. “There is this flailing about the economy.” “Disillusion has settled in among the public over the direction of the country that will likely not fade anytime soon,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The first half of 2011 has been nothing short of an economic disappointment.” “Growth in the economy has just not been what people expected,” said Bret Barker, a portfolio manager at Los Angeles-based TCW Group Inc., which manages about $120 billion in assets. “The Fed is going to want to sit and wait and see what is going to happen.” “The Fed would be prepared to take additional action, obviously, if conditions warranted, including the purchase of more Treasury securities,” Chairman Bernanke said yesterday after U.S. central bankers met in Washington. “Bernanke’s remarks kept that door open to more bond buying,” said former Fed Governor Lyle Gramley, currently senior economic adviser at Potomac Research Group in Washington. “The hurdle for QE3 is obviously high. But if large downside


risks materialize and the economy slows enough so that the unemployment rate starts to increase again, QE3 would have to be considered.�

LAST WEEKS ECONOMIC RELEASES Date

ET

Economic Report

Tue. Jun 21

10:00 Existing Home Sales

For

Estimate Actual

Prior

Impact

May

4.78M

5.05M

Moderate

4.81M

Wed. Jun 22 14:15 FOMC Meeting

Jun

Thu. Jun 23 8:30

6/18

418K

429K

414K

Moderate

Thu. Jun 23 10:00 New Home Sales

May

305K

319K

323K

Moderate

Fri. Jun 24

8:30

Gross Domestic Product

Q1

1.8%

1.8%

1.8%

Moderate

Fri. Jun 24

8:30

GDP Chain Deflator

Q1

1.9%

1.9%

1.9%

Moderate

Fri. Jun 24

8:30

Durable Goods Orders

May

1.0%

1.5%

-3.6%

Moderate

Jobless Claims

UNCH

HIGH

THIS WEEKS ECONOMIC RELEASES Date

ET

Economic Report

For

Mon. Jun 27

8:30

Personal Consumption Expenditures

YOY

Mon. Jun 27

8:30

Personal Consumption Expenditures

May

Mon. Jun 27

8:30

Personal Income

Mon. Jun 27

8:30

Tue. Jun 28

Estimate Actual

Prior

Impact

1.0%

HIGH

0.2%

0.2%

HIGH

May

0.3%

0.4%

Moderate

Personal Spending

May

0.0%

0.4%

Moderate

10:00

Consumer Confidence

Jun

60.0

60.8

Moderate

Wed. Jun 29

10:00

Pending Home Sales

Jun

0.7%

-11.6%

Moderate

Thu. Jun 30

8:30

Jobless Claims

6/25

421K

429K

Moderate

Thu. June 30

9:45

Chicago PMI

Jun

53.5

56.6

HIGH

Fri. July 1

10:00

ISM Index

Jun

51.0

53.5

HIGH

Fri. July 1

10:00

U of Mich Consumer Sentiment Index

Jun

71.8

71.8

Moderate

RATE SAMPLER (Rates subject to change) CONV 30 YEAR FIXED 4.5 % with no points APR 4.679%

FHA 30 YEAR FIXED 4.25% with no points APR 5.119%

5/1 FHA ARM LOAN 3.25% with no points APR 3.779%

THIS STATEMENT OF LOAN TERMS AND CONDITIONS IS NOT AN OFFER TO ENTER INTO AN INTEREST RATE OR DISCOUNT POINTS AGREEMENT, OR ANY SUCH OFFER MAY ONLY BE MADE PERSUANT TO SUBD. 3 & 4 OF MN STATUTE

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