Last week in the News – Economic Update!

Based largely on a cooling housing market and falling oil prices, the Federal Reserve on September 20 left the benchmark overnight lending rate between banks at 5.25%, exactly where it has been since June 29, when the Fed halted a two-year stretch of 17 consecutive rate hikes. U.S. housing starts in August fell 6% from July to an annual pace of 1.67 million units, the slowest rate since April 2003, the Commerce Department reported September 19. Economists had forecast a decline to 1.75 million units. Starts are down 19.8% from August 2005. Oil prices fell below $61 a barrel on September 22, from an intraday peak of $78.40 on July 14. Many analysts said receding fears about this year’s Atlantic hurricane season and ample worldwide supplies could keep downward pressure on crude futures. The Labor Department reported September 19 that wholesale prices rose a scant 0.1% in August, another sign that inflationary pressures were easing. Core inflation, which excludes energy and food prices, behaved even better, falling 0.4% after a 0.3% drop in July. The back-to-back declines in core inflation were the first in more than three years. The Conference Board’s Index of Leading Economic Indicators slipped 0.2% in August, following a similar 0.2% dip in July. The decline matched analysts’ expectations. The index, which measures 10 key sectors of the economy, predicts economic activity three to six months into the future. The number of U.S. workers filing unemployment claims increased by 7,000 to 318,000, slightly higher than analysts expected, the Labor Department reported September 21. This week look for updates on existing home sales on September 25. Compliments of American Home Mortgage Investment Corp.