Market Update

Retail Sales snapped a six consecutive monthly losing string by unexpectedly rising by +1.0% in January, their largest increase since November 2007. Many retailers cleared their inventories by offering deep discounts during after-Christmas sales and consumers waited for the sales before loosening their purse strings. The surprisingly strong jump in Retail Sales easily exceeded the consensus estimate of -0.4%. After factoring out the effect of auto sales, Retail Sales rose by 0.9% vs. a forecast of -0.3%.

The labor market remains perilous. Weekly Initial Jobless Claims dropped by 8,000 claims to 623,000, a little higher than the economic forecast of 610,000. The four-week moving average increased by 24,000 to 607,500 claims, the highest level in more than 26 years. The four-week moving average for continuing claims hit a new all-time record, increasing by 73,750 claims to reach 4.75 million, the highest level since recordkeeping began in 1967.

The latest news out of Washington, D.C. indicates congressional leaders have agreed on tax cut and spending provisions in President Obama's "Financial Stability Plan" totaling $789 billion. The final vote on the bill by the House and Senate will most likely take place by Friday and then on to President Obama to sign over the weekend.

Foreclosure rates dropped in January by 10% from December signaling that recent efforts of mortgage modifications and moratoriums prove to be helping. The report showed that 1 in every 466 US homes received a foreclosure filing in January. The states with the top foreclosure rates were Nevada, California and Arizona.

Brought to you, courtesy of The Mortgage Market Guide.

The market commentary material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without error.

* Please note that if you have a mortgage interest rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a rate renegotiation policy. Contact me for details.