Mortgage Market News

U.S. construction spending surged in April to an annual rate of $1 trillion, up 2.2% from March, and a near six and a half year high. The 2.2% rise was the largest monthly percentage increase since May 2012 and was better than the 0.8% increase expected. The gains were led by a jump in private construction to the tune of 1.8%. Public construction also saw big gains soaring 3.3%. Strong support from construction could lead to a more solid economy as the year progresses.
Inflation remained tame in April from March and also remained subdued on a year-over-year basis. The Federal Reserve's favorite inflation gauge, the Core PCE, rose by a scant 0.1% in April, below the 0.2% expected. From April 2014 to April 2015, the Core PCE rose by 1.2%. The Federal Reserve wants to see inflation trend to near its 2% mark annually. Core PCE measures prices paid by consumers for goods and services, which excludes volatile food and energy prices.
Consumer spending in April was flat as Americans channeled incomes into savings accounts. The Commerce Department reported on Monday that Personal Spending was unchanged in April, which was below the 0.2% expected and down from the 0.5% recorded in March. Personal Incomes rose by a healthy 0.4%, and with spending flat the savings rate rose by 5.6%, the second highest level since December 2012.
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