We received some good economic news in some marginally important reports early this week. The 10 year bond which had remained in the low 1.60% range since the end of last week moved up slightly to 1.66%. Mortgage rates remain at 3.5% for a 30 year fixed. There were three reports of any consequence and with the Republican Convention being almost over and the Dem’s approaching, both will have spins on the reports:
- GDP came in as projected at 1.7%, up from 1.5% last quarter. Both numbers reflect modest gains and most surprisingly, right at consensus. Politically, both parties will make claims about the numbers. The Dems will say that the economy is growing and the numbers are an improvement over last quarter. The GOP will claim that while the numbers are improved, they are too low to be helpful. And both will be correct.
- Home prices in all 20 major markets showed year-over-year increases in pricing. The increases in the various major markets ranged from 4%-14%. The Dems will claim the housing crisis has bottomed out. The GOP will say, that yes, we’re up 4-14% from last year but we’re still down over 30% from 2007.
- And the Home Sale Index, a measuring stick for the activity in the housing market, was up a higher than expected 2.4% reflecting good housing sales activity. There was improvement in three of the four regions of the country and our year-on-year measuring stick is up 12.4%. NAR is blaming lack of inventory for not having even better numbers. The Dems will quote the statistics and the GOP will talk about the huge foreclosure shadow inventory. The edge goes to the Dem’s argument. If the huge shadow inventory was on the market, would more houses been sold?
The rest of the week holds the weekly jobless claims, personal income and outlays and then Ben Bernanke speaks before Congress on Friday. I wouldn’t expect big movements before Ben speaks Friday and then only if he drops an unexpected bombshell.
With the Broncos wrapping up their pre-season tomorrow night and the Buffs and CSU kicking off the college season Saturday, a football tidbit might be fun. The Central Penn Predators are a minor league football team. Their coach truly believes in protecting his quarterback’s blind side. His left guard is 6’5” and 370 pounds. His left tackle is 6’11” and 500 pounds. For comparison purposes, the first time the Broncos went to the Super Bowl, their average offensive lineman weighed 285 pounds, slightly more than half of what that tackle weighs. Or for another comparison, Shaquille O’Neal from the NBA, who was larger than any NFL player at the time, was 7’ 1” tall and weighed in at 325 pounds. Where are they finding these guys?
Have a great end of your week.