Economic Update

For the first time since April of 2007, the Dow closed in positive territory for eight consecutive days. The winning streak ended Friday with the Dow closing down 36 at 9544.

Inflation remained tame last month, as the Federal Reserve's favorite gauge of inflation; the Core Personal Consumption Expenditure Index, came in at 1.4% year-over-year, the smallest rise since September 2003. The monthly Core PCE was 0.1%, just below June's reading of 0.2%. Inflation is essentially non-existent currently but it will certainly return when the economy picks up.

Contained in the PCE report was data on consumer spending, which revealed an increase for the past three months. Interestingly, the boost appears to be from auto sale increases resulting from the Government's "Cash for Clunkers" program. Until the labor market stabilizes, we may not see a more meaningful pickup in consumer spending.

Next week is a big week for economic reports as FOMC Minutes will be released, ADP Employment Report and on Friday the government payrolls report. There are no Treasury auctions scheduled aside from the usual offerings.

Lock in your purchase or refinance now while rates are still historically low!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com